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:
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.