• Home
  • About
  • Subscribe
  • LATIF
  • Conferences
  • Dashboard
  • Edit My Profile
  • Log In
  • Logout
  • Register
  • Edit this post

Room 151

  • 151 BRIEF

    What's New?

  • Slough welcomes commitment that Office for Local Government ‘will not be a burden’

    June 30, 2022

  • Homes England agrees strategic partnership with two authorities

    June 29, 2022

  • Soaring inflation and pay pressures to add £3.6bn to council budgets

    June 28, 2022

  • Underfunded social care reforms could ‘exacerbate workforce pressures’

    June 27, 2022

  • Nottingham City Council leader labels proposed intervention as ‘disappointing’

    June 27, 2022

  • Government preparing to intervene in Nottingham City Council

    June 23, 2022

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews
  • Briefs

MMF vote delay could see reforms hit the rocks

0
  • by Colin Marrs
  • in Treasury
  • — 27 Feb, 2014

Proposed regulations which could hit local authority investments in money market funds (MMFs) could be scuppered by a decision to delay a vote on the matter during a stormy session of a European Parliament committee.
Last month, representatives of the MMF investment industry, along with investors from the private and public sector visited Brussels to campaign against the changes.
And last week, the European Parliament’s economic and monetary affairs committee (ECON) voted 23 to 15 to delay a vote on the issue, after some members complained that the issue had not been discussed properly.
A statement released by ratings agency Fitch following the vote said: “The ECON committee has a rescheduled vote to finalise draft rules on 10 March. With European Parliamentary elections due in May, it is by no means certain that the previous timetable, which envisaged a full European Parliament vote in April, can be met.”
Michael Quicke, chief executive of CCLA, who was part of the lobbying efforts last month, told Room151 this week: “During our discussions in Brussels, our principal interest was to make sure that the committee was fully aware of the landmine they were putting their foot on.
“What has happened is people are coming round to the fact that there is a real issue here. I think we played a small part in that.”
He said that if the committee continued to find it difficult to reach a compromise on the proposals before European elections in May, the issue would have to be reconsidered by the new Parliament, with the potential that it goes back to the drawing board.
CCLA, along with organisations from other European countries, objects to two parts of the EU’s MMF reform proposals.
Firstly, new rules would require all constant net asset value MMFs to retain a 3 per cent buffer, which objectors believe would mean fund managers would withdraw from the instrument.
Additionally, the proposals would ban retail investors from investing in constant net asset value MMFs – under a separate EU regulation, councils will be considered retail investors from 2015.
Fitch has also pointed to a proposal which it says would prevent MMFs investing in ABCP backed by assets other than trade receivables.
It said: “In practice, this would prevent MMFs investing in almost all ABCP conduits.”
MMFs are considered a safer investment option than a bank deposit because the funds investments are diversified.
During the committee session, Belgian MEP Philippe Lamberts, member of the green Ecolo party, accused those trying to block a vote of “delaying tactics”.
He said: “I am not a finance person but i know enough to tell truth from bullshit. As a legislator, surrendering to the bullying of the industry, I won’t take it.”
But fellow committee member Gay Mitchell, of the Irish Fine Gael Party, pointed out that concerns were not only being raised by the finance industry, but also by public bodies including local authorities.
He said: “We have been asked to vote on something that we don’t know the implications of. I am only asking for time so people have time to understand it.”

Share

You may also like...

  • Impact Awards: Councils can make ‘game-changing’ difference to carbon management 22nd Apr, 2021
  • ESGenius: Slashing emissions will fuel green growth for decades 23rd Feb, 2021
  • Prudential Code: Are financial investments a case of ‘mistaken identity’? 21st Oct, 2021
  • Economy: Inflation on the rise while the MPC sticks with ‘patient approach’ 28th Jul, 2021

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • 151 BRIEFS – WHAT’s NEW?

    • Homes England agrees strategic partnership with two authorities
    • Soaring inflation and pay pressures to add £3.6bn to council budgets
    • Underfunded social care reforms could ‘exacerbate workforce pressures’
    • Nottingham City Council leader labels proposed intervention as ‘disappointing’
    • Government preparing to intervene in Nottingham City Council
  • Room151’s LGPS Roundtables

    Biodiversity
    Valuations & Risk
    LGPS Women

  • Room151’s LGPS Roundtables

    Biodiversity
    LGPS Women
    Valuations & Risk
  • Latest tweets

    Room151 5 hours ago

    Hillier confirmed as keynote speaker for LATIF/FDs’ Summit: Dame Meg Hillier, chair of the Public Accounts Committee, has been confirmed as a keynote speaker for Room151’s combined Local Authority Treasurers Investment Forum (LATIF) and FDs Summit. The… dlvr.it/ST70F7 pic.twitter.com/hxV676Iley

    Room151 5 hours ago

    Councils’ funding at risk due to ‘undercounting’ in census data: Population estimates in London and Manchester may have been significantly underestimated in the 2021 census potentially threatening government funding for frontline services in these… dlvr.it/ST707J pic.twitter.com/VncIyaXa01

    Room151 2 days ago

    Gove at LGA: councils to receive two-year financial settlement: Michael Gove has announced that councils will receive a two-year financial settlement from next year to provide authorities with “financial certainty” and allow them to plan ahead. The… dlvr.it/ST0kSV pic.twitter.com/wxL3UM4sGO

    Room151 2 days ago

    LGPS valuations: the digital journey: Rob Bilton explains how technology is helping to deliver one of the most complex data exercises in the world of public sector pensions. The 2022 valuations for LGPS funds in[...] dlvr.it/ST0kMq pic.twitter.com/VxjSPC2Uvo

    Room151 6 days ago

    Conrad Hall: ‘more sophisticated’ regulation needed for local government: The chair of the CIPFA/LASAAC Code Board has questioned the sophistication of financial regulation in local government and the continuing focus of the Department for Levelling Up,… dlvr.it/SSnPBV pic.twitter.com/G5d7JCWF8c

    Room151 1 week ago

    Slough Council approves plans to restructure finance department: Slough Borough Council has approved plans to restructure its finance department to enhance capacity and capability and to address a “significant weakness” in the function. The local… dlvr.it/SSf8DG pic.twitter.com/l5lmyHmkBg

  • Register to become a Room151 user

  • Previous story LPFA pulls out of Pensions Infrastructure Platform
  • Next story London shared service plan, Birmingham pensions deficit, corporate services spending, land joint venture…

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares