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

Room 151

  • 151 BRIEF

    What's New?

  • Social care workforce crisis ‘requires government intervention’

    August 15, 2022

  • Consultation opens on future of IFRS 9 statutory override

    August 12, 2022

  • EAPF criticised for water company investments

    August 10, 2022

  • Welsh pension fund confirms £50m investment in clean energy

    August 10, 2022

  • Inflation ‘disastrous’ for local services, warns LGA

    August 10, 2022

  • Consultation opens into care charging reforms

    August 9, 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

EU reaches agreement on money market fund regulations

0
  • by Colin Marrs
  • in Treasury
  • — 24 Nov, 2016

The European Union has finally thrashed out new rules on money market funds – although full details remain unclear.
A deal was agreed last week, following the fifth “trilogue” meeting between the European parliament, council and commission.
The agreement will see the introduction of a new category of MMF – the low volatility net asset value (LVNAV) MMF, but it is still unclear whether the threatened abolition of constant net value (CNAV) MMFs is included.

Photo: European Parliament

Photo: European Parliament

However, MEP Neena Gill, European Parliament rapporteur on MMFs, said: “I believe this is a win-win deal for both major European MMF sectors, variable and constant net asset value MMFs respectively.”
She said that the key objectives of preventing future systemic risks and runs on MMFs have been addressed by the new deal.
She said: “I am particularly pleased we found a viable operational model for low volatility net asset value (LVNAV) MMFs, which was introduced at the European Parliament’s initiative.”

The new LVNAV would have strict concentration requirements to reduce risk, plus strict daily and weekly liquidity requirements.
It will also have a strict portfolio fluctuation band, meaning that it cannot deviate by more than 20 basis points from the actual net asset value – far stricter than the 50 basis points used by CNAVs.
In addition, LVNAVs would have a new regime of “fees and gates” to help prevent runs in times of crisis.
The deal will now go to the Committee of Permanent Representatives in the European Union, made up of the head or deputy head of mission from the EU member states in Brussels.

After that committee has carried out work to finalise technical issues, legislation will be put before parliament late this year or early next for a vote.
After originally proposing to abolish CNAVs, the European Parliament’s economic and monetary affairs committee (ECON) voted by 35 to 18 for a compromise draft document, which would allow public bodies to continue investing in constant net asset value MMFs.
Public sector bodies and charities had opposed the move to abolish CNAVs, but it is as yet unclear if the compromise has survived the trilogue process.

Get the Room151 Newsletter

Share

You may also like...

  • Code revision will end ‘intentional misinterpretation’ 28th Jul, 2021
  • ‘Better governance and greater transparency’ could help improve financial decision making 25th Feb, 2021
  • MRP could inflict ‘massive harm’, LATIF North delegates told 22nd Mar, 2022
  • New realities of investing cash and liquidity: “What to do now?” 13th Jan, 2021

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • 151 BRIEFS – WHAT’s NEW?

    • Social care workforce crisis ‘requires government intervention’
    • Consultation opens on future of IFRS 9 statutory override
    • EAPF criticised for water company investments
    • Welsh pension fund confirms £50m investment in clean energy
    • Inflation ‘disastrous’ for local services, warns LGA
  • Room151’s LGPS Roundtables

    Biodiversity
    Valuations & Risk
    LGPS Women

  • Room151’s LGPS Roundtables

    Biodiversity
    LGPS Women
    Valuations & Risk
  • Latest tweets

    Room151 4 days ago

    LATIF/FDs’ Summit ‘on course to be biggest yet’: Room151’s flagship event – the Local Authority Treasurers Investment Forum (LATIF) and FDs’ Summit – is on course to be the biggest yet, with more than 200 delegates expected. Combining[...] dlvr.it/SWSDrL pic.twitter.com/f8FXzcAdWB

    Room151 4 days ago

    ‘Local government treated worse than any other part of public sector’: Clive Betts, chair of the Levelling Up, Housing and Communities Committee, talks to Mike Thatcher about lack of progress on levelling up, pork-barrel politics and why local government… dlvr.it/SWRk1L pic.twitter.com/Jpw0BsOsy3

    Room151 5 days ago

    Which LGPS pools and funds are attending the LGPS Investment Forum on Nov 2 & the LGPS Private Markets Forum on Nov 1st? Answer here: lnkd.in/eDHU8tuy pic.twitter.com/D3gd63Rh7F

    Room151 6 days ago

    LGPS and levelling up: nothing to fear but fear itself: There have been a number of objections to government plans for LGPS funds to invest 5% of their assets in local projects. But George Graham says these objections can be[...] dlvr.it/SWL7vt pic.twitter.com/ebwBEkZTy4

    Room151 6 days ago

    George Graham @SYpensions @bordertocoast channels his inner FDR in a call for local government pension funds to avoid the fear factor and embrace levelling up #LGPS #localgov room151.co.uk/local-governme…

    Room151 7 days ago

    Changes to rules on capital receipts raise wider questions: Stephen Kitching argues that DLUHC’s latest rule changes are part of a series following on from revisions to MRP guidance and the purchase of commercial property. He questions whether… dlvr.it/SWGqKC pic.twitter.com/Ycr5hWZDPk

    Room151 1 week ago

    ‘No ifs, no buts’: the Bank of England continues its battle with inflation: Partner Content: CCLA Investment Management’s Robert Evans discusses the MPC’s 0.5% increase in the Official Bank Rate and its ongoing commitment to the 2% inflation target… dlvr.it/SW7SNC pic.twitter.com/ryOzYRSNA9

    Room151 2 weeks ago

    DLUHC changes rules on flexible use of capital receipts: The levelling up secretary has written to all council leaders to amend the rules concerning the flexible use of capital receipts to fund transformation projects. In his letter, Greg Clark[...] dlvr.it/SW3jyX pic.twitter.com/KEhSSaMITl

    Room151 2 weeks ago

    Local audit and financial reporting: let’s take back control: Mazars’ Suresh Patel suggests three steps that auditors and council finance teams should take to help get financial reporting and local audit back on track. Following my recent appearance… dlvr.it/SW0PfV pic.twitter.com/miL7pjukce

  • Register to become a Room151 user

  • Previous story First LGPS pools get green light
  • Next story News Roundup: Essex £100m infra mandate…

© Copyright 2022 Room 151. Typegrid Theme by WPBandit.

0 shares