Money Market Funds

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EESC opinion: Money Market Funds

Key points

The EESC:

  • welcomes the proposal;
  • endorses the Commission's decision to use a regulation rather than a directive to regulate this sector. Given the characteristics of MMFs, uniform and immediately applicable rules are crucial;
  • calls on uniform and immediately applicable rules for the MMFs to be applied jointly with US authorities;
  • considers that constant net asset value (CNAV) funds, should be converted into variable net asset value (VNAV) funds and that the 3% capital buffer seems insufficient – given that the biggest possible risk faced was over 6% – to cope with liquidity demands at a time when all operators must anticipate considerable turmoil in the market and may rush to withdraw their investments.

Other relevant EESC opinions: