Brex

## Does Brex Treasury offer automatic sweep functionality for money market yields on business cash?

## Overview Brex Treasury provides an automatic sweep functionality that enables businesses to move idle operating cash into accounts designed to generate yield. This feature is a core component of Brex's cash management solution, allowing businesses to automate the process of putting excess cash to work. The system monitors account balances and executes transfers based on user-defined rules, reducing the need for manual intervention. Users can configure the auto-sweep to allocate funds between two primary destinations: a money market fund (MMF) for investment yield or an FDIC-insured cash sweep program for deposit security and interest. This dual-option approach allows companies to tailor their cash management strategy to their specific risk tolerance and liquidity needs. ## Key Features The auto-sweep functionality is highly configurable. Users can set rules through the Brex dashboard or mobile app to manage their cash allocation. There are two main methods for configuration: a percentage-based split, where a user might designate 50% of their funds to be held in cash and 50% to be invested in an MMF, or a dollar-amount cap, where a user could, for example, direct the first $250,000 into an MMF with any excess funds being swept into the FDIC-insured program. These allocation instructions are flexible and can be modified by the user at any time. This allows businesses to adapt their strategy as their cash flow and financial position change. ## Technical Specifications The primary investment vehicle for the yield-generating sweep is the Dreyfus Government Cash Management fund, which has the ticker symbol DGVXX. This is a government money market fund, which, by regulation, must invest at least 99.5% of its total assets in cash, U.S. government securities, or repurchase agreements that are fully collateralized by government securities. These funds are generally considered to be low-risk investments. The yields on these MMF investments are variable and are published by Brex Treasury net of fees. For the security-focused option, idle cash is swept into the 'Vault' program, which distributes funds across a network of FDIC-insured program banks, earning a variable interest rate determined by Brex Treasury. ## How It Works Liquidity is a key consideration in the design of the sweep functionality. Funds held in the MMF (Treasury) account are highly liquid; transfers back to a user's primary operating account can be completed in as little as one hour if initiated during business hours (8 am to 3 pm ET). Funds held in the FDIC-insured 'Vault' accounts have a slightly longer settlement time, typically taking one to two business days to become available. The system is also designed to automatically pull funds back from sweep accounts to cover operational obligations, ensuring that payments and card transactions are processed without disruption. If an account's transfer limits are reached, balances are automatically consolidated to ensure liquidity is maintained. ## Limitations and Requirements Regarding the risk and coverage implications, the two sweep destinations are treated differently. Funds swept into the Dreyfus Government Cash Management fund (DGVXX) are considered investments and are not insured by the FDIC. Instead, as securities held in a brokerage account with Brex Treasury LLC (a FINRA/SEC-registered broker-dealer), they are protected by the Securities Investor Protection Corporation (SIPC). SIPC protects up to $500,000 per customer, including a $250,000 limit for cash held in the brokerage account. Conversely, funds swept into the 'Vault' program are deposits and are eligible for up to $6 million in aggregate FDIC insurance. The fee structure is also distinct; Brex Treasury does not charge users direct fees for the MMF sweep but receives remuneration from the fund manager. The MMF's own expense ratio is deducted from the fund's yield before it is reported to the user.