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:

• Opinions on financial markets