Regulatory

Periodically IMMFA responds to consultations on behalf of the money market fund industry. This process has been particularly important as the future shape of European money market fund regulation has been debated. Open consultations and our responses on the relevant issues are included below, as is the finished legislation.


FCA and BoE Consultation Paper on Resilience of Money Market Funds

In response to the FCA’s Discussion Paper DP22/1 on Resilience of Money Market Funds which was launched on 23 May 2022 and was published jointly with the Bank of England with the endorsement of the Treasury, IMMFA submitted the attached response providing industry views on some of the proposed reforms. After considering feedback from the Paper, the UK Authorities will decide whether to consult further.

European Commission’s Targeted consultation on the functioning of the Money Market Fund Regulation

On 12 April, the European Commission launched a consultation targeted at relevant stakeholders and users of money market funds, in particular to investors and managers of MMFs, to understand the impact of existing rules on these stakeholders and users. We expect the feedback received to feed into the Commission’s report to the co-legislators on the adequacy of the Money Market Fund Regulation, set to be published in July 2022.

ESMA Consultation Paper on highly liquid financial instruments with regards to the investment policy of central counterparties

On 19 November, ESMA launched a consultation paper examining the potential extension of the list of financial instruments eligible for investments by central counterparty clearing houses (CCPs) under European Market Infrastructure Regulation (EMIR) and the possibility of including EU Money Market Funds in the allowed list of investments.

EBA Public Consultation on draft RTS setting out criteria for identifying shadow banking entities including MMFs

On 26 July, the European Banking Authority (EBA) launched a public consultation on draft regulatory technical standards (RTS) setting out criteria for the identification of shadow banking entities for the purposes of reporting large exposures (Article 394 of Regulation (EU) No 575/2013). The consultation runs until the 26 October. The large exposure framework is a tool for monitoring the loss or disruption which a credit institution could face in the event of the sudden failure of a client or group of clients. Next steps: The deadline for submission of comments is 26 October. A public hearing will take place via conference call on 29 September.

Financial Stability Board (FSB) – Published Consultation Report

On 30 June the Financial Stability Board (FSB) published its Consultation Report on Policy Proposals to Enhance Money Market Fund Resilience. The report highlights what the FSB perceive to be ‘structural vulnerabilities’ in MMFs ‘stemming from liquidity mismatches, the use of these funds as cash management instruments, as well as from certain fund structures and regulations.’ The FSB set out ‘policy proposals to enhance MMF resilience, including with respect to the appropriate structure of the sector and of underlying short-term funding markets’. The proposals form part of the FSB’s work programme on non-bank financial intermediation and ‘aim to inform jurisdiction-specific reforms and any necessary adjustments to the policy recommendations for MMFs issued by IOSCO’.

ESMA Consultation Paper on potential reforms of the EU Money Market Funds Regulation

On 26 March 2021, ESMA launched its consultation on potential reforms of the EU Money Market Funds Regulation (MMFR). ESMA’s aim is to review the stress experienced by MMFs during the March 2020 crisis and assess the roles played by markets, investors and regulation.

HM Treasury Response to its consultation on a new “Overseas Fund Regime”

HMT published on 9 November 2020 their consultation response to the Overseas Fund Regime. This document (which can be accessed in the link below) summarises the responses (including IMMFA’s response) to the consultation and explains the government’s approach to legislating for the OFR after considering those views.

HM Treasury consultation on a new ‘Overseas Fund Regime’

HM Treasury consultation on a new ‘Overseas Fund Regime’ (OFR) intended to streamline the regime for the recognition of overseas investment funds (including money market funds) in the UK – March 2020.

ESMA Call for Evidence / Consultation on Asset Segregation and Custody Services under AIFMD and UCITS - 15 July 2016

ESMA Call for Evidence / Consultation on Asset Segregation and Custody Services under AIFMD and UCITS - 15 July 2016. The deadline for responses is 23 September 2016.

ESMA Consultation Paper - Revision of the Provisions on Diversification of Collateral in ESMA’s guidelines on ETFs and other UCITS issues - 20 December 2013

ESMA Consultation Paper - Revision of the Provisions on Diversification of Collateral in ESMA’s guidelines on ETFs and other UCITS issues - 20 December 2013