NEW YORK, NY January 20, 2015 – Goldman Sachs Asset Management (“GSAM”) today announced that its U.S. government money market funds intend to operate in accordance with the new definition of “government money market fund” established by the Securities and Exchange Commission in July 2014.
Though compliance with the new government money market fund definition is not required until October 2016, GSAM will comply with the new definition and its requirements early in response to investor demand to help ease the transition to new money market fund rules.
“We hope that by confirming that our government money market funds will comply with the new definition of “government money market fund” today, we will simplify one aspect of implementation during this transition period,” said Jim McNamara, Global Head of Third Party Distribution. “Government money market funds will remain an important liquidity solution, and we want to make it clear that we are committed to offering government money market funds with a stable net asset value and without liquidity fees or redemption gates.”
On December 17, 2014, the Goldman Sachs Funds’ Board of Directors approved changes that clarify that the funds will comply with the new definition of “government money market fund,” which requires that a fund invest 99.5% or more of its assets in cash, U.S. government securities, and/or repurchase agreements that are collateralized fully by cash or U.S. government securities. In addition, the Board did not elect to implement “liquidity fees” and / or “gates” at this time. “Government money market funds” meeting this definition are neither required to float their net asset values (NAVs) nor required to impose a “liquidity fee” and / or “gate” that temporarily restricts redemptions from the funds when liquidity levels fall to certain levels.
As a matter of practice, these changes will have no impact to each fund’s investment profile. “We’ve historically limited the investments of these funds only to U.S. government securities, because investors generally seek out government money market funds for their explicit investment in government-only strategies,” said Jim McNamara, Global Head of Third Party Distribution. “These updates are merely designed to give investors assurance about the funds’ compliance with the new rules. We recognize that implementation of the new rule set will be a phased process for most investors, and could require a reevaluation of all available liquidity options with large-scale policy, operational, and technological changes in order to implement.”
The GSAM Money Market Funds impacted are as follows:
- Goldman Sachs Financial Square Government Fund
- Goldman Sachs Financial Square Federal Fund
- Goldman Sachs Financial Square Treasury Obligations Fund
- Goldman Sachs Financial Square Treasury Instruments Fund
GSAM’s Global Liquidity Management business has a long history as a leading government money market fund provider.
