MMFR

The publication of the Money Market Funds (“MMF”) regulation 2017/1131 in June 2017 came into effect on July 21, 2018. New MMFs created from this date are required to comply from inception while existing MMFs should comply by January 21, 2019. The MMF Regulation aims to address the issue of divergent approaches amongst various nations in the EU which distort cross-border competition while also failing to mitigate vulnerabilities as evidenced during the financial crisis Its implementation would uniformize rules and reporting requirements in the EU with the ultimate goal to ensure stability and reliability of MMFs as short-term financial instruments for governments, corporations and financial institutions alike.

Some key points covered by the regulation include: scope and categorization of the MMF, investment policy requirements such as eligible assets, diversification/concentration and credit quality limits, portfolio risk requirements such as WAM, WAL, liquidity, credit ratings, know your customer and stress testing. Needless to say, the regulation introduces additional levels of complexity on the legal, risk management and operational front.

For more information on MMFR, download here.