Members' Research Service By / July 25, 2017

Money Market Funds: Measures to improve stability and liquidity [EU Legislation in Progress]

Written by Marcin Szczepański (3rd edition), Money Market Funds (MMFs) are a type of collective fund that invest in short-term…

© Anton Gvozdikov / Fotolia

Written by Marcin Szczepański (3rd edition),

financial background
© Anton Gvozdikov / Fotolia

Money Market Funds (MMFs) are a type of collective fund that invest in short-term debt and provide financing for financial institutions, corporations and governments. During the financial crisis their liquidity and stability were challenged, which prompted the Commission to propose a regulation on MMFs, in 2013. Its proposal aimed to improve their ability to weather stressed market conditions, mainly through establishing a capital buffer, introducing conditions on portfolio structure, addressing over-reliance on external credit rating agencies and improving their internal risk management, transparency and reporting.

The final text lays down rules and common standards to ensure that MMFs have a stable structure and improved liquidity, that they invest in diversified assets of a sufficiently high credit quality, and are able to deal with unexpected redemption requests. It was approved by the EP in April 2017 and by the Council in May.



Proposal for a regulation of the European Parliament and of the Council establishing a Union certification system for aviation security screening equipment
Committee responsible: Economic and Monetary Affairs (ECON) COM(2013) 615
procedure ref.: 2013/0306(COD)
Ordinary legislative procedure (COD) (Parliament and Council on equal footing – formerly ‘co-decision’)
Rapporteur: Neena Gill (S&D, United Kingdom)
Shadow rapporteurs:





Brian Hayes (EPP, Ireland)

Syed Kamall (ECR, United Kingdom)

Petr Ježek (ALDE, Czech Republic)

Fabio De Masi (GUE/NGL, Italy)

Philippe Lamberts (Greens/EFA, Belgium)

Procedure completed Regulation (EU) 2017/1131
OJ L 169, 30.6.2017, pp 8-45

Stage: adoption



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