Assets of US prime money market funds for large investors posted their first weekly increase in four months, snapping a protracted drop due to regulations that went into effect in October, the Money Fund Report said on Wednesday.
Institutional prime money funds gained $34.9 million in assets to $122.55 billion in the week ended November 15, according to the report, published by iMoneyNet.
Overall money fund assets grew by $6.81 billion to $2.654 trillion in the latest week, marking four straight weeks of gains.
On October 14, the Securities and Exchange Commission's (SEC) final phase of its reform for the money fund industry took effect, aimed at safeguarding the sector from the sort of panic withdrawals that followed the collapse of Lehman Brothers and contributed to the credit crunch that ensued during the financial crisis of 2008-09.
Under these SEC rules, institutional prime funds and some tax-free funds must allow their share price to "float" from $1 and/or impose fees and limit redemptions during times of financial turmoil.
Money fund operators switched many of their institutional prime funds into ones that own only government securities in an effort to be exempt from the SEC rules.
Until this week, institutional prime fund assets were down by roughly $873 billion from the end of August 2015, while institutional government-only fund assets grew by about $822 billion, according to iMoneynet data.
Meanwhile, corporate treasurers and other cash investors have pulled money from prime funds, which they had used as an alternative to bank accounts, because they dislike the imposition of floating share prices and redemption limits and fees during periods of market turbulence.
Institutional government-only money fund assets fell by $3.50 billion to $1.611 trillion in the latest week.
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