Throughout August you will have seen a number of regulators publishing updated circulars, opinions and notices in relation to the application of the ESMA Guidelines on stress test scenarios under the Money Market Fund Regulation (EU) 2017/1131 (MMFR). Including regulators such as the: MFSA, CMVM, Central Bank of Ireland, FSMA & CSSF.
The European Securities and Markets Authority (ESMA) has launched a consultation on potential reforms of the EU Money Market Funds Regulation (MMFR). This follows the SEC’s request for comment seen last month, which similar to the ESMA consultation, reviews the stress experienced by MMFs during the March 2020 crisis and assesses and proposes potential reforms.
Earlier this month the Securities and Exchange Commission (SEC) published a request for public comment on potential reform measures to improve the resilience of money market funds. The request follows the report of the President’s Working Group on Financial Markets issued in December 2020.
Welcome to the first monthly regulatory round-up of 2021. Each month we will be summarising the key announcements and regulatory developments impacting the fund industry. The past month brought developments on a range of issues, from updated FAQs and guidelines impacting UCITS and AIFMs, to consultations…
Last month it was great to see a number of key liquidity developments finally enter into force, including: ESMA’s new guidelines on liquidity stress testing in UCITS and AIFs, The FCA’s new rules for certain open-ended funds investing in inherently illiquid assets; and Article 37 MMF Reporting for both Q1 and Q2.
The 30 September compliance deadline is fast approaching for a number of liquidity developments. Including: ESMA’s new guidelines on liquidity stress testing in UCITS and AIFs. The FCA’s new rules for certain open-ended funds investing in inherently illiquid assets. FCA and Bank of England survey to review the liquidity mismatch in open ended funds Article 37 MMF Reporting for both Q1 and Q2.
On 31 March 2020, the European Securities and Markets Authority (ESMA) announced that it was delaying the first reports by money market funds managers under the Money Market Funds Regulation (MMF Regulation) until September 2020. The original date for submissions was April 2020. The delay was due to an update to the XML schema.
Fund liquidity problems witnessed in 2019 with Woodford and H2O Asset Management brought liquidity back into the spotlight. Since then, the focus hasn’t really faded on the issue of liquidity, and if anything, has intensified with the COVID-19 pandemic causing market volatility resulting in several more fund suspensions.
Although 2020 has already seen a number of initiatives intended to address liquidity risk, there are still more to come, with September due to be a particular busy month for risk management professionals.