Veronica Iommi, recently appointed as secretary general at the Institutional Money Market Funds Association (IMMFA), provided an in-depth overview of Money Market Funds (MMFs) in Europe in her presentation at the ACT Cash Management Conference 2020. For reference, IMMFA is the only trade association in Europe dedicated to MMFs, and its core objective is to promote and support the development and integrity of the MMFs industry. In recent years IMMFA has worked for the industry and investors to provide a collective voice on the EU Money Market Fund Regulation, as well as a number of ongoing issues relevant to investors.
Iommi presented the key objectives and characteristics of MMFs – security, liquidity, yield, structure, diversification and scale – and how they compare to cash deposits. IMMFA played a key role in influencing the shaping of the new EU Money Market Fund Regulation. A comparison of the product range pre- and post-reform was explained along with the effect of its implementation from an investor standpoint and current trends driving treasurers’ use of MMFs. Growth in IMMFA members’ assets under management (AUM) is continuing post-reform. At 7 February, AUM of IMMFA members represented a total (including sterling, euro and USD) of €761bn.
Iommi developed five themes that investors are focusing on:
1. Brexit;
2. Benchmark reform linked to the transition away from Libor;
3. Technology;
4. ESG; and
5. Capital Markets Union.
“As recognised by the European Commission, money market funds enable the channelling of liquidity in financing for the real economy,” she said.
Iommi concluded by outlining the association’s priorities for 2020 and beyond.