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The Money Market Funds (MMFs) Regulation
The Money Market Funds (MMFs) Regulation
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The Money Market Funds (MMFs) Regulation

06/03/2017

Our regulatory memo explaining the Money Market Funds (MMFs) Regulation: what it is, its scope, key dates and how it will impact you

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:

  • Enhance financial stability within European markets by preventing the risk of contagion potentially transmitted by the “run” of MMFs to money markets and to their sponsors (mainly financial institutions)
  • Increase investor protection by reducing the disadvantages for late redeemers in stressed market conditions

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).

 

Download the Money Market Funds regulatory memo:

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