FTSE Global Markets writes "European parliament passes Money Market Fund (MMF) regulation". The article explains, "New rules to make money market funds (MMFs) more resistant to crises and market turbulence were approved on Wednesday by MEPs. MFFs supply easily accessible liquid assets to business start-ups and small and medium-sized enterprises (SMEs), but can be vulnerable to panic runs on their money. To improve stress resistance, the new rules require them MMFs to diversify their asset portfolios, invest in higher-quality assets, meet liquidity and concentration requirements and have in place sound stress testing processes conducted at least quarterly. MMFs assets will have to be valued at least once a day and the result should be published daily on the MFF's website. The regulation will change the MMF landscape for investors in EU-domiciled MMFs, providing new categories of funds and criteria by which they have to abide. Now that the regulation is finalised, the European Securities and Markets Authority (ESMA) will draft subsidiary guidelines to clarify technical details." The piece quotes Rapporteur Neena Gill, "I believe this is a win-win deal for both major European MMF sectors, variable and constant net asset value MMFs (VNAVs and CNAVs) respectively. The key aims of preventing future systemic risks and runs on funds have been addressed. I am particularly pleased that we found a viable operational model for low volatility net asset value MMFs, which was included at the European Parliament's initiative." See also, "EU OKs Law Making E1 Trillion In Money Market Funds Safer," which says, "The European Parliament voted by a wide majority Wednesday to pass tough new rules covering the €1 trillion ($1.07 trillion) money market funds sector, bringing more oversight to areas of shadow banking after more than three years of hard negotiating among European Union members. The rules were adopted by the parliament with 514 votes in favor, 109 against and 71 abstentions, four months after representatives of the European Council, the 28-nation bloc's political arm, rubber-stamped them."
