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.
The Bank of England's call for evidence on ‘Access to Bank of England payments infrastructure and balance sheet for payment firms’ - Nov 2019
The Bank of England launched a call for evidence in November 2019 on ‘Access to Bank of England payments infrastructure and balance sheet for payment firms’.
Money Market Fund Reform
ESMA Final Report on MMF Reporting - 19 July 2019
Money Market Fund Reform
ESMA Final Report - Guidelines on Stress Test Scenarios under MMF Regulation - 19 July 2019
Money Market Fund Reform
Financial Conduct Authority Policy Statement on Money Market Fund Regulation - July 2018
Money Market Fund Reform - UK
Financial Conduct Authority consults on implementing MMF Regulation January 2018.
Money Market Fund Reform
European Commission sets out approach to MMF secondary legislation in Better Regulation Roadmap January 2018.
Money Market Fund Reform
ESMA (European securities regulators) submit advice to European Commission on secondary legislation November 2017.
Money Market Fund Reform
ESMA Final Report - Guidelines on stress test scenarios under the MMF Regulation - 13 November 2017
Money Market Fund Reform
ESMA (European securities regulators) consulted on secondary legislation during Summer 2017.
Money Market Fund Reform
Political agreement reached during trilogues November 2016, text approved by European Parliament and Council in December 2016.
Money Market Fund Reform
Money Market Fund Reform - European Council position 10th June 2016
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.
European Commission - Public Consultation - CMU Action on Cross-border Distribution of Funds Across the EU - 2 June 2016
European Commission - Public Consultation on Cross-border Distribution of Funds Across the EU - 2 June 2016
BCBS Consultation on Identification and Measurement of Step-in Risk - December 2015
BCBS Consultation on Identification and Measurement of Step-in Risk - December 2015
EBA Guidelines on Exposures to Shadow Banking - 14 December 2015
The EBA has issued guidelines on limits on EU institutions' exposures to shadow banking entities, within which definition they include MMFs.
European Commission - Call for evidence: EU regulatory framework for financial services - 30 September 2015
European Commission- Call for evidence: EU regulatory framework for financial services - 30 September 2015
Money Market Fund Reform
Money Market Fund Reform - European Commission Proposal - 4th September 2013
ESMA Discussion Paper MIFID II / MiFIR - 22 May 2014
ESMA Discussion Paper MIFID II / MiFIR - 22 May 2014
ESMA Final Report - Revision of the Provisions on Diversification of Collateral in ESMA's Guidelines on ETFs and other UCITS Issues - 24 March 2014
ESMA Final Report - Revision of the Provisions on Diversification of Collateral in ESMA's Guidelines on ETFs and other UCITS Issues - 24 March 2014
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
ESRB Recommendations on Money Market Funds
The ESRB Recommendations on Money Market Funds. This was not a formal consultation but we responded to the report.
FSB Consultation
'Strengthening Oversight and Regulation of Shadow Banking' - November 2012
IOSCO Consultation - Money Market Fund Systemic Risk Analysis and Reform Options
The consultation issued by IOSCO considering potential reform to money market fund regulation
