We stumbled across an odd report entitled, "Deutsche Bank AG: New EU money market fund regulation: Will growth continue?" It says, "In the past three years, European money market funds (​MMFs) have grown by an impressive EUR 260 bn to EUR 1.​16 trillion in invested assets. MMFs have attracted large inflows, which have particularly gone into non-​euro assets benefiting from rising USD yields. In addition, the appreciation of the dollar has led to higher assets under management (​AuM) measured in euro. Yields on euro assets have been low or even negative but in line with alternative money market investments." The piece adds, "​EU regulation issued in June 2017 and taking effect in 2018 aims at bolstering MMFs against financial distress. It introduces tighter rules on portfolio diversification, liquidity and transparency. Sponsor support is explicitly prohibited. Newly introduced MMF categories are likely to accommodate current investor preferences as regards accounting methods (​variable or constant net asset value).... A "​hard Brexit" could trigger a repatriation of GBP-​denominated and UK-​focused MMFs with approximately EUR 213 bn in AuM. Furthermore, a proprietary UK regulation similar to old EU rules could spark regulatory competition for the offshore USD MMF market. Currently, euro area MMFs manage EUR 326 bn in USD-​denominated assets. USD- and GBP-​denominated funds are predominantly domiciled in Ireland and Luxembourg."

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