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TD Asset Management announces product strategy for money market funds


TD Asset Management (TDAM) has announced plans to adjust its money fund lineup to address regulatory changes adopted by the US Securities and Exchange Commission (SEC) in July 2014. 

The adjustments will take effect on 14 October, 2016.  

In the government money market fund category, the following products will be offered: TDAM US Government Portfolio; TDAM Institutional US Government Fund; and TDAM Institutional Treasury Obligations Money Market Fund.

Under the SEC's new rules, a government money market fund must invest at least 99.5 per cent of its total assets in US government securities, cash, or repurchase agreements collateralised by US government securities or cash. Historically, TDAM has managed its government and Treasury funds consistent with this new requirement and will continue to do so. Government and Treasury money market funds are exempt from new requirements for liquidity fees and redemption gates, although they could voluntarily adopt fees and/or gates in the future upon prior notice to shareholders. TDAM does not intend to impose liquidity fees or redemption gates on any of its government or Treasury funds. Finally, government funds will continue to use the amortised cost method of valuation to transact at a stable net asset value (NAV) of USD1.00 per share. 

In the retail money market fund category, the following products will be offered: TDAM Money Market Portfolio; TDAM Municipal Portfolio; TDAM California Municipal Money Market Portfolio; and TDAM New York Municipal Money Market Portfolio.

Retail money market funds are defined under the new rules as funds that have policies and procedures reasonably designed to limit all beneficial owners to natural persons, whether investing directly or through an omnibus account held at a custodian. Retail money market funds will continue to transact at a stable NAV of USD1.00 per share, but will be subject to liquidity fees and redemption gates. 

Prime and municipal money market funds that are available to institutional investors must transact at a floating NAV and will be subject to liquidity fees and redemption gates.  TDAM will offer the following floating NAV products: TDAM Institutional Money Market Fund; and TDAM Institutional Municipal Money Market Fund.

Many of the changes will require approval from the funds' board of directors and disclosure in the funds' registration statements and will not take effect until the necessary approvals have been obtained and the disclosures have been filed. 

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