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Money Market Funds

European regulation – compromise on the horizon?

Overview

In this article, we consider the current status of the Regulation and how it compares to some of the key rules adopted by the SEC last year: particularly

  • the calculation of the NAV;
  • the introduction of liquidity fees and redemption gates;
  • increased disclosure;
  • diversification; and
  • stress testing.

We also explore some of the proposals for compromise suggested during negotiations which may be discussed at the upcoming Parliament debates.

Money Market Funds

Next steps

The European Parliament is due to discuss the Regulation in its March plenary session, following which a revised draft of the Regulation is likely to be released. It will be interesting to see which aspects of the various proposals are voted through and how the Regulation develops.

In the US, amendments to the SEC’s revised rules became effective 60 days after their publication in the Federal Register on 14 October 2014. Compliance is required on a staggered basis: 14 July 2015 for the new Form N-CR, 14 April 2016 for amendments to diversification, stress testing, disclosure, Form PF and Form N-MFP, while compliance date for the floating NAV amendments and the fees and gates amendments is 14 October 2016.

Money Market Funds
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