Shearman & Sterling LLP | FinReg | Revised EU Guidelines on Stress Testing of Money Market Funds Published
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  • Revised EU Guidelines on Stress Testing of Money Market Funds Published

    Following its consultation in late 2018, the European Securities and Markets Authority has published final reports and updated guidelines on stress testing money market funds and the requirements imposed upon MMFs to report information to national regulators under the EU Money Market Funds Regulation.

    The MMF Regulation has applied directly across the EU since July 21, 2018. MMFs are fund vehicles that invest in highly liquid short-term debt instruments, such as government bonds, and are often regarded as a short-term cash management function alternative to bank deposits. The MMF Regulation requires MMFs and MMF managers to measure the impact of the common reference stress test scenarios, as specified by ESMA in guidelines, and to report the outcomes to their national regulators. The first MMF reports are due by the end of Q1 2020.

    ESMA's final reports set out the feedback that ESMA received in its consultation and ESMA's response, as well as the text of the final guidelines. The MMF stress testing guidelines update the initial guidelines published by ESMA in March 2018. The MMF reporting guidelines are new guidelines and are supplemented by new technical reporting instructions, which are intended to help establish homogenous reporting.

    View the MMF stress testing guidelines.

    View the MMF reporting guidelines.

    View the MMF reporting instructions.

    View details of ESMA's related consultation.

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    TOPIC: Funds