The Money Market Funds Regulations 2018 have been laid before Parliament and will enter into force partly on June 28, 2018 and fully on July 21, 2018. The EU Money Market Funds Regulation came into force on July 20, 2017 and will apply directly across the EU from July 21, 2018. MMFs are fund vehicles that invest in highly liquid short-term debt instruments, such as government bonds, often used by institutions as a short-term cash management function as an alternative to bank deposits. The effect of the MMFR in the U.K. will be that authorized unit trusts, authorized contractual schemes, open-ended investment companies and alternative investment funds can all apply to be authorized as MMFs.

The MMFR does not require transposition into the national law of EU Member States. However, U.K. legislation must be amended to empower the Financial Conduct Authority to authorize funds as MMFs, to levy fees and to enforce requirements under MMFR.

The Regulations make the following changes to U.K. primary and secondary legislation:

• Amendments to the provisions of the Financial Services and Markets Act 2000 on the FCA's powers of authorization and intervention in relation to unit trusts and contractual schemes. The amendments will enable existing authorized unit trusts or authorized contractual schemes to apply for authorization as a MMF and for funds newly applying to become authorized unit trusts or authorized contractual schemes to make a simultaneous application for authorization as a MMF.
• Amendments to the Open-Ended Investment Companies Regulations 2001. The amendments will enable existing open-ended investment companies to apply for authorization as a MMF and for funds newly applying for authorization as an open-ended investment company to be authorized as an open-ended investment company which is also a MMF.
• Amendments to the Alternative Investment Fund Managers Regulations 2013 to provide the FCA with powers in relation to applications for AIFs to be authorized as MMFs, including a procedure for refusal and revocation of MMF authorization.
• Amendments to the Financial Services and Markets Act 2000 (Qualifying EU Provisions) Order 2013. These amendments are necessary to enable the FCA to enforce requirements imposed by the MMFR.

From the date of application of the Regulations, asset management firms will be required to pay fees to the FCA associated with the authorization of MMFs. The FCA consulted on fees and other changes to its Handbook in a consultation which closed on March 23, 2018.

View the Money Market Funds Regulations 2018 (S.I. 2018/698).

View the explanatory memorandum.

View details of the FCA consultation on changes to its Handbook.