Following its adoption by the Council of the EU, the Money Market Funds Regulation has been published in the Official Journal of the EU. Therefore, the transition period for the implementation of the Regulation has begun.

As indicated in our update of 10 May 2017, the Council of the European Union adopted the Money Market Funds Regulation (the “Regulation”) without comment on 16 May 2017.  Today (30 June 2017) the Regulation was published in the Official Journal of the EU, meaning it will formally enter into force on 20 July 2017. The Regulation will then apply as and from 21 July 2018.

Article 44 of the Regulation provides for an 18 month transitional period wherein an existing CNAV MMF will have to convert to either a Public Debt CNAV MMF or a LVNAV MMF. This transitional period will conclude on 21 January 2019. Accordingly, a manager of an existing CNAV MMF should commence its review of those provisions of the Regulation which govern Public Debt CNAV MMFs and LVNAV MMFs so that the manager can determine which product type most closely resembles the existing CNAV MMF and is most attractive to its investor base.

Contributed by Niall Crowley