Irish law firm Dillon Eustace published, a "Money Market Funds Regulation ('MMF Regulation') Update," which says, "On the 28 September 2018, ESMA published a Consultation Paper setting out draft guidelines on stress test scenarios under the MMF Regulation, which applies to all new and existing money market funds ('MMFs'). In accordance with Article 28 of the MMF Regulation, each MMF is required to establish sound stress testing processes that allow for the identification of possible events or future changes in economic conditions which could negatively impact on a MMF. In order to assess the potential impact that such events or changes could have on a MMF, the manager of a MMF must regularly conduct stress testing based on objective criteria and consider the effects of severe plausible scenarios. Where the stress testing reveals any vulnerability of a MMF, the manager of the MMF is obliged draw up an extensive report with the results of the stress testing and a proposed action plan. Article 28 of the MMF Regulation obliges ESMA to develop guidelines with a view to establishing common reference parameters of the stress test scenarios to be included in the stress tests which managers of MMFs are required to conduct. ESMA is obliged to update these guidelines at least every year taking into account the latest market developments. ESMA published the first set of these guidelines on 21 March 2018 (the "Guidelines"), however, it indicated at the time that section 4.8 of those Guidelines would be updated so that managers of MMFs have the stress testing information needed to fill in the corresponding fields in the reporting template mentioned in Article 37 of the MMF Regulation (i.e. the reporting template that must be used by managers of MMFs to report certain prescribed information to the competent authority of each MMF that they manage on a periodic basis). This information will include specifications on the type of stress tests and their calibration as well as the way to report the results in the reporting template."

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