Pensions & Investments writes "Europeans hope to avoid outflows as new money market rules loom." The article tells us, "Regulatory changes to money market funds in Europe are expected to carry fewer implications for investors and managers than similar reforms did for their U.S. counterparts, but asset owners still need to adjust their policies, observers said. One key task before July 21, when the new pan-European law comes into force, will be for European investors to change their investment policies to include new categories of money market funds, such as instruments with a variable, or floating, net asset value.... Investors globally instead have preferred constant net asset value funds. But under the new regulations, those no longer will be available for prime money market funds." The piece adds, "In the U.S., $1.2 trillion worth of investments left prime money market funds when a 2016 reform required them to have a floating NAV. To avoid this outcome on the Continent, the European Commission has allowed another type of money market fund, called low-volatility NAV funds. These funds would trade similarly to the constant NAV funds as long as certain criteria are met. However, they would convert into a variable NAV money market fund under certain circumstances. For this reason, sources said, investors need to allow variable NAV funds in their policies. Most investors now have policies in place that allow them to buy constant NAV funds, without any mention of floating-value funds, said Dennis Gepp, senior vice president, managing director and chief investment officer, cash, at Federated Investors (FII) (UK) LLP in London."

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