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Taking new European Money Market Fund Regulation Serious


In the run up to 19th of January 2019, the number of Money Market participants’ regulatory updates, preparation notes and other announcements have increased.

In addition to selecting post-reform structures as for example Morgan Stanley, Goldman and Federated have done and as illustrated below, funds will need to comply with Article 18 Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds (MMFR): 

 

Article 18 reads as follows: A Money Market Fund shall not hold more than 10 % of the money market instruments, securitisations and ABCPs issued by a single body.

How do funds comply with Article 18 on European Money Market Reform?
It is actually really easy, funds that wish to comply should contact Pieter van Dyck at pvd@cmdportal.com for an Article 18 subscription. This feed will allow funds to calculate on a daily basis their holdings against the issuer's oustanding. CMD's Article 18 feed is unique in that is takes into account issuer, dealer and investor submissions. 

Financial Conduct Authority  - UK 

The European Money Market Funds (MMF) Regulation (29 pages) (July 2018) 
Published in July 2018, this Policy Paper sets out the FCA's response to the feedback  received on their Consultation Paper CP18/4. In the CP, the FCA propose a series of Handbook amendments
and new fees schedules to reflect the coming into force of the European Money Market Funds (MMF) Regulation (‘the MMF Regulation’).


ESMA
ESMA Publishes Final Report on Money Market Funds Rules: The final report contains final versions of the technical advice, draft implementing technical standards (ITS), and guidelines on stress test scenarios carried out by MMF managers under the MMFR. The key requirements relate to asset liquidity and credit quality, the establishment of a reporting template and stress test scenarios carried out by MMF managers.

BNY Mellon 
BNY Mellon - EU Money Market Reform: An Overview   (2 Pages) (2018)  

This provides a short summary of the new rules and a comparison matrix of the new
categories of money market funds that highlight product structure, composition, and valuation methods.


IMMFA
IMMFA - EU MMF reform-IMMFA investor pamphlet May 2018 (4 pages) (2018)

This overview by the Institutional Money Market Funds Association provides a comprehensive matrix on the new Money Market Fund categories. 

 

Morgan Stanley
European Money Market Fund Reform Transition Plan Announcement (3 pages) (June 2018)

Goldman Asset Management
GSAM’s European Money Market Fund Regulation Transition Date (3 pages) (July 2018)

HSBC
European Money Market Funds Reform (7 pages) (2018)
Gives a timeline and suggest what investors need to be thinking about, and doing, in the run up to rule implementation. In addition it explains the HSBC approach.

Federated
Federated Investors Announces Post-reform Structures of European Money Market Funds (3 pages) (May 208)




 



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