The European Commission has put forward a Proposal for Regulation of Money Market Funds which would, if enacted, materially change the shape of the MMF sector. The EACT has published a position paper setting out the detriment to non-financial companies who are users of MMFs for the investment of their short term liquidity. Of particular concern are the proposals to ban credit ratings for funds, and in effect to abolish Constant Net Asset Value (CNAV) funds.
The ACT fully supports this position paper and has already made submissions to European Commissioners along similar lines. The ACT position was also set out in our submission to the Financial Oversight Council in the US.
