ING Funds has selected BNY Mellon Asset Servicing and Investor Analytics, to model the impact of interest-rate shocks, credit risk shocks and liquidity risk shocks on its six money market funds.
This service, available through BNY Mellon’s strategic alliance with Investor Analytics, will help money market funds comply with Rule 2a-7 issued by the US Securities and Exchange Commission (SEC). The rule requires money market funds to examine combinations of potential stresses.
The suite of stress tests was developed by Investor Analytics and is available through BNY Mellon’s asset servicing technology platform. The tests examine changes in fund NAV resulting from parallel and non-linear shifts in yield curves, changes in credit spreads, increasing redemption requests, downgrade/default simulations and combinations of these stresses.
Joseph Keenan, managing director and head of relationship management for financial institutions at BNY Mellon Asset Servicing, said: “Our selection by ING reinforces our commitment to providing a broad range of services to the mutual fund industry. We see this capability as a foundation for providing risk analysis and stress testing for our clients globally as regulatory pressures continue to rise.”
Damian Handzy, CEO of Investor Analytics, said: “Large and small firms alike are not only looking to satisfy existing and contemplated regulations, but more importantly, they are looking for ways to better understand how market dynamics — interest rates, credit events and redemptions, can each affect the portfolio individually and in combination.”