Conversion and Operational Changes
Following completion of the regulatory approval process with our regulator regarding implementation of Money Market Funds Regulation (“MMFR”) by State Street Liquidity Plc. (“Fund”), we will convert the Fund into MMFR compliant categories, with the conversions to be effective on 18 February 2019.
The conversion of the funds into MMFR compliant fund categories will take place over the weekend of the 16/17 February, effective 18 February 2019. Shareholder notification dated 24 January outlining the upcoming changes has been issued and is available on our website at
Our current range of GBP, USD and EUR prime funds will be converting to Low Volatility NAV (LVNAV) funds. This fund type most closely resembles the current prime CNAV funds. For our GBP and USD LVNAV funds, these will trade providing a constant NAV calculated to 2 decimal places under normal market conditions. In response to the joint announcement from the CBI and the Luxembourg Commission de Surveillance du Secteur Financier (CSSF) confirming that the Reverse Distribution Mechanism (“RDM”) will not be compatible with the new regulation, we will be converting our current EUR prime fund into a EUR LVNAV fund with accumulating shares. In order to permit greater accuracy in the pricing of shares in the negative yield environment of EUR LVNAV fund, we will be (i) consolidating shares for each share to be priced at 1000.0000 and (ii) reporting out to 4 decimal places. This will enable the full price change movement to be captured in the NAV price and provide full transparency. By doing this, we will be able to continue offering the same cut-off and intraday liquidity, as well as offering a product that best prepares investors for a move back to a positive yield environment.
Other benefits of the LVNAV accumulating class structure are:
Please note however that LVNAV share classes with accumulating share classes will not maintain a constant NAV in a negative yield environment. The State Street USD Treasury Fund will convert into the Public Debt CNAV (PDCNAV) fund.
This represents little change in regards to investment restrictions, requiring a holding of 99.5% in government debt, and the fund will maintain a constant NAV. Our current EUR Ultra Short Bond Fund will be converted into a Standard Variable NAV (SDVNAV) Money Market fund.
Yes, the funds will continue to be managed in accordance with the requirements to maintain a Triple-A rating from a Credit Rating Agency (CRA).2
We will have a full product range available, subject to investor demand.
Our GBP and USD LVNAV funds will operate in the same way as our current prime CNAV funds during normal market conditions, there are no operational changes that investors will need to be aware of. Dealing cut-off, intra-day redemptions and contract note delivery will remain the same, subject to the regulatory approval. Dealing and settlement requirements will be unaffected. Our EUR fund will update the income distribution policy to stop distributing the negative income. This will cause the negative income to hit the NAV as it currently does in the accumulating classes. The NAV will decrease by the negative income of the fund each day. This change the fund accounting methodology from a type that treats negative income as income, to one which treats this income as a capital de-accumulation. The value of the account is not different in these two methods. For severe market stress situations, we disclosed in the prospectus of the Fund conditions under which we may need to implement liquidity fees, redemption gates or suspension of redemptions in accordance with the MMFR requirements. The implementation of these tools is subject to the specific criteria, as follows:
LVNAV intra-day settlement times will not change.
For the LVNAV Funds, dealing cut-off times will be unchanged.
Yes, orders can be placed either in cash or unit amounts for both subscription and redemption trades across all fund types for all cut-offs and valuation points.
Yes, investors can continue to trade using Swift.
Daily and weekly maturing asset figures will be shown on the SSGA Cash website at ssga.com/cash. Figures will be updated daily, providing investors with full transparency of the liquidity levels within the funds.
For the LVNAV and Short-Term VNAV fund types, guidance from external accounting firms would indicate that investments will be treated as Cash and Cash Equivalent, however we would encourage investors to seek independent advice.
Should you have any further questions, please contact your SSGA Cash sales representative directly or contact us at:
or +44 (0)20 3395 2333.
1 Information represented in this piece does not constitute legal, tax, or investment advice. Investors should consult their legal, tax, and financial advisors before making any financial decisions.
2 Subject to confirmation from the relevant CRA.
For Professional Client Use Only. Not for use with the public.
Belgium: State Street Global Advisors Belgium, Chaussée de La Hulpe 120, 1000 Brussels, Belgium. T: 32 2 663 2036, Facsimile: 32 2 672 2077. SSGA Belgium is a branch office of State Street Global Advisors Limited. State Street Global Advisors Limited is authorised and regulated by the Financial Conduct Authority in the United Kingdom.
Germany: State Street Global Advisors GmbH, Brienner Strasse 59, D-80333 Munich. Authorised and regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (“BaFin”). Registered with the Register of Commerce Munich HRB 121381. T: +49 (0)89-55878-400. F: +49 (0)89-55878-440. ssga.com. Ireland: State Street Global Advisors Ireland Limited is regulated by the Central Bank of Ireland. Registered office address 78 Sir John Rogerson’s Quay, Dublin 2. Registered number 145221. T: +353 (0)1 776 3000. F: +353 (0)1 776 3300. Web: ssga.com.
Netherlands: State Street Global Advisors Netherlands, Apollo Building, 7th floor Herikerbergweg 29 1101 CN Amsterdam Amsterdam, Netherlands. T: 31 20 7181701. SSGA Netherlands is a branch office of State Street Global Advisors Limited. State Street Global Advisors Limited is authorised and regulated by the Financial Conduct Authority in the United Kingdom. ssga.com.
United Kingdom: State Street Global Advisors Limited. Authorised and regulated by the Financial Conduct Authority. Registered in England. Registered No. 2509928. VAT No. 5776591 81. Registered office: 20 Churchill Place, Canary Wharf, London, E14 5HJ. T: 020 3395 6000. F: 020 3395 6350. ssga.com.
Switzerland: State Street Global Advisors AG, Beethovenstr. 19, CH-8027 Zurich. Authorised and regulated by the Eidgenössische Finanzmarktaufsicht (“FINMA”). Registered with the Register of Commerce Zurich CHE-105.078.458. T: +41 (0)44 245 70 00. Facsimile F: +41 (0)44 245 70 16. ssga.com. Investing involves risk including the risk of loss of principal. Past performance is not a guarantee of future results. The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent. The above targets are estimates based on certain assumptions and analysis. There is no guarantee that the estimates will be achieved. The information provided does not constitute investment advice as such term is defined under the Markets in Financial Instruments Directive (2014/65/EC) or applicable Swiss regulation and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell any investment. It does not take into account any investor’s or potential investor’s particular investment objectives, strategies, tax status, risk appetite or investment horizon. If you require investment advice you should consult your tax and financial or other professional advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information. This communication is directed at professional clients (this includes eligible counterparties as defined by the appropriate EU regulator, or applicable Swiss regulator, who are deemed both knowledgeable and experienced in matters relating to investments. The products and services to which this communication relates are only available to such persons and persons of any other description (including retail clients) should not rely on this communication.
You should obtain and read a Key Investor Information Document and Prospectus relating to the SSGA Cash funds prior to investing. Further information, including the annual and semi-annual reports and the Key Investor Information Document and Prospectus describing the characteristics, charges, expenses and risks involved in your investments are available for residents of countries where SSGA cash funds are authorized for sale, at ssga.com/cash and from your local SSGA office.
These investments may have difficulty in liquidating an investment position without taking a significant discount from current market value, which can be a significant problem with certain lightly traded securities. For Investors in Switzerland: The collective investment scheme referred to herein is a collective investment scheme under Irish Law. Prospective investors may obtain the current sales prospectus, the articles of incorporation, the simplified prospectuses as well as the latest annual and semi-annual report free of charge from the Swiss Representative and Paying agent, State Street Bank GmbH Munich, Zurich Branch, Beethovenstrasse 19, 8027 Zurich as well as from the main distributor in Switzerland, State Street Global Advisors AG, Beethovenstrasse 19, 8027 Zurich. Before investing please read the prospectus and the KIID, copies of which can be obtained from the Swiss representative, or at ssga.com. The information contained in this communication is not a research recommendation or ‘investment research’ and is classified as a ‘Marketing Communication’ in accordance with the European Communities (Markets in Financial Instruments) Regulations (2014/65/EU) and applicable Swiss regulation. This means that this marketing communication (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research (b) is not subject to any prohibition on dealing ahead of the dissemination of investment research. This Message may contain confidential information intended only for the use of the addressee named above. If you are not the intended recipient of this message you are hereby notified that any use, dissemination, distribution or reproduction of this message is prohibited. If you are not the intended recipient of this email communication, please notify us immediately by email direct to the sender and then destroy any electronic or paper copy of this message.
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ID15636-2404380.1.1.EMEA.INST Exp. Date: 31/01/2020