The Commission adopted today a report to the European Parliament and the Council on the functioning of Regulation (EU) 2017/1131 on money market funds (the MMF Regulation). Money market funds are investment funds that invest in short-term debt instruments such as securities issued by banks, businesses or governments, thereby playing a key role in the short-term financing of the economy. For their investors, they present an alternative to bank deposits. Since entering into application in January 2019, the MMF Regulation has significantly strengthened the regime applicable to money market funds in the EU and helped to enhance financial stability.
In line with Article 46(1) of the MMF Regulation, the Commission has assessed the functioning of the framework from a prudential and economic point of view. The assessment draws on a number of studies carried out by European and international bodies including ESMA, ESRB and FSB and the results of a targeted consultation published in 2022.
The Commission report highlights that the MMF Regulation has enhanced financial stability and overall successfully passed the test of the recent market stress episodes. It also identifies certain vulnerabilities in the market for MMFs and areas which would merit further assessment. The Commission will therefore not propose a revision of the legislation at the present stage. The Commission will continue to carefully monitor the money market funds sector and related vulnerabilities based on the work of the European Securities and Markets Authority and relevant National competent authorities.
Related links
Details
- Publication date
- 20 July 2023
- Author
- Directorate-General for Financial Stability, Financial Services and Capital Markets Union