Money Market Funds Regulation—essentials
Money Market Funds Regulation—essentials

The following Financial Services guidance note provides comprehensive and up to date legal information covering:

  • Money Market Funds Regulation—essentials
  • What is the MMF Regulation?
  • What is an MMF?
  • What are the risks associated with MMFs?
  • Authorisation of MMFs operating in the EU
  • Investment policies of MMFs
  • Prudential rules applicable to MMFs
  • UK implementation of the MMF Regulation
  • Latest developments in relation to the Money Market Funds Regulation

What is the MMF Regulation?

Following its work on shadow banking and investment funds, the European Commission identified a number of concerns about money market funds (MMFs). In response, the European Commission ('Commission') published the original proposal for a Regulation on Money Market Funds (MMF Regulation) in September 2013, following recommendations by the International Organization of Securities Commissions (IOSCO) and the Financial Stability Board (FSB). The MMF Regulation was published in the Official Journal of the EU on 30 June 2017, and applies to new MMFs from 21 July 2018 and to existing MMFs from 21 January 2019. The MMF Regulation is designed to increase investor protection and to limit the risk that money market funds (MMFs) pose to the integrity and stability of financial markets.

The MMF Regulation applies to MMFs established, managed or marketed in the EU, whether they are authorised as undertakings for the collective investment in transferable securities (UCITS) under UCITS IV and UCITS V (see Practice Notes: Key provisions of UCITS IV—authorisation of UCITS and UCITS V), or as alternative investment funds (AIF) under the Alternative Investment Fund Managers Directive (AIFMD). The MMF Regulation supplements the provisions of UCITS IV and the AIFMD and must be applied in addition to the rules laid down in both directives.

What is an MMF?

MMFs are an