The Money Market Funds (MMFs) Regulation
Money Market Funds (MMFs) are an important source of short-term financing for financial institutions, corporates and governments and therefore are viewed as part of shadow banking. In fact MMFs are one of five workstreams identified by the FSB (Financial Stability Board) in 2012 in relation to the Shadow Banking System.
In September 2013, partly in response to concerns around shadow banking, the European Commission (EC) issued a draft text proposal on MMFs.
The proposal has two key objectives:
On July 2014 the SEC issued new rules requiring in particular that US institutional MMFs price and transact at a “floating” net asset value (NAV).