The European Commission’s Proposals on the Regulation of Money Market Funds

Position papers from EACT and IMMFA

The EACT has published a position statement commenting on the European Commission’s proposed Money Market Funds regulation. The EACT argues that for the real economy there is one fundamental flaw in the proposal – the bar on the use of external credit ratings. The EU’s intention to require CNAV funds to hold a capital buffer is also highlighted as a measure that is likely to make the CNAV product unviable; the EACT proposes instead improvements in disclosure and the use of liquidity gates and fees, the combination of all of which would better support the real economy than introducing capital buffers.

The EACT argues that for the real economy there is one fundamental flaw in the proposal – the bar on the use of external credit ratings. The EU’s intention to require CNAV funds to hold a capital buffer is also highlighted as a measure that is likely to make the CNAV product unviable; the EACT proposes instead improvements in disclosure and the use of liquidity gates and fees, the combination of all of which would better support the real economy than introducing capital buffers.

Position Statement on the Commission Proposal for Regulation of Money Market Funds, 29 October 2013

The European Association of Corporate Treasurers (EACT)

The EACT is a grouping of national associations representing treasury and finance professionals in 18 countries of the European Union. We bring together about 12,000 members representing 6,500 groups/companies located in the EU.  We comment to the European authorities, national  governments, regulators and standard-setters on issues faced by treasury and finance professionals across Europe. 

We seek to encourage the profession of treasury, corporate finance and risk management, promoting the value of treasury skills through best practice and education.

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