A press release entitled, "IMA Money Market Sectors to Follow European Definitions" tells us, "The [U.K.-based] IMA today announces that it will create two money market sectors, based upon the ESMA [European] "Short Term Money Market" and "Money Market" definitions that were introduced into the FSA Handbook in July 2011. The new IMA sectors will become effective as of 1 January 2012. The IMA has adopted in principle the new FSA definitions of money market funds with effect from 1 July 2011. Firms were granted a six month transition period to bring their funds into compliance with the new rules and sector definitions. At this stage the IMA can confirm that ten funds will join the IMA Short Term Money Market Sector and six will join the IMA Money Market Sector. A number of firms have not yet confirmed which sector their fund will sit in. Whilst the usual IMA policy is to have a minimum number of ten funds in a sector, the IMA has decided to make an exception in this case to ensure consistency with the FSA Handbook. To monitor funds' compliance with the sector definition, firms will provide quarterly certification to Morningstar, the IMA's monitoring company, that they have met the FSA rules. From 1 January 2012, firms will also supply monthly portfolio holding data for each fund to Morningstar. The IMA will review the money market sectors in twelve months' time." Jane Lowe, Director of Markets at the IMA, comments, "Following consultation with our members, we have decided the IMA money market sectors should reflect exactly what appears in the FSA Handbook. We have long had concerns about the proliferation of descriptions for money market funds. Introducing regulatory definitions for authorised money market funds brings welcome clarity for consumers in both the UK and other European countries."
