Website Law360 writes "EU Waves Through E1T Money Market Fund Rules." The article explains, "Tough new rules covering the €1 trillion ($1.07 trillion) money market funds sector were formally adopted by European Union lawmakers on Tuesday, bringing greater oversight to areas of shadow banking. The EU’s General Affairs Council, made up of foreign ministers and member states, adopted the regulations without discussion, after the European Parliament voted overwhelmingly in support of the proposals in April." The piece quotes Malta's Minister and current European Council President Edward Scicluna, "These rules will go a long way in improving supervision and regulation of a largely unregulated sector. Whilst money market funds are vital to investors and issuers alike, the crisis showed us that they can also be vulnerable to shocks." Law360 adds, "The new rules, which will come into force 12 months after being adopted, set out investment requirements for the funds. MMFs must be invested in a diverse pool of assets with good credit quality to restrict the funds' risk levels. The rules also introduce common standards for all MMFs, to increase their liquidity and ensure they do not collapse when faced with a sudden surge of redemption requests. In addition, the regulation prohibits sponsor support from third parties, including banks." (For more, see our April 5 News, "HSBC's Curry Talks on Pending European Money Fund Reform, LVNAV.")

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