Money Market Funds - U.S. 2014 rules vs EU draft 2015 rules

Article

Money Market Funds - U.S. 2014 rules vs EU draft 2015 rules

Executive Summary

After much debate, the European Institutions (the European Parliament, the Council of the EU and the European Commission) are holding discussions on the latest draft of the regulation on Money Market funds (the Regulation). Originally proposed as part of a set of reforms to the UCITS regime, the Regulation will affect all European domiciled money market funds (MMFs), including UCITS and AIFs.

It has changed significantly since its original draft: some recent compromises reflect the approach adopted by the Securities and Exchange Commission (SEC) in 2014, particularly the replacement of the European “3 percent buffer” for MMFs with a constant net asset value, with a system of redemption gates and liquidity fees. 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 definition of Constant Net Asset Value (CNAV) MMFs; the introduction of liquidity fees and redemption gates; increased disclosure; diversification; and stress testing.

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Performance magazine issue 18, September 2015

Performance is a triannual digest, dedicated to investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients.

PDF - 7mb
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