Central Bank Statement On Money Market Funds And Share Cancellation

Author:Arthur Cox
Profession:Arthur Cox
 
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The Central Bank issued a statement (jointly with Luxembourg's CSSF) on 11 January regarding the incompatibility of reverse distribution mechanisms, such as share cancellation, with the Money Market Funds Regulation (EU/2017/1131) ("MMFR"). The MMFR applied on 21 July 2018 with a transitional period for existing money market funds ("MMFs") until on 21 January 2019. Accordingly, those pre-existing MMFs should have submitted their applications and supporting documentation for authorisation as MMFR compliant funds to the Central Bank by this date. They were also required to submit details of their arrangements for ceasing the use of share cancellation. The Central Bank must make its authorisation decision by 21 March 2019, which effectively provides an extension to this date to confirm that they have ceased use of reverse distribution mechanisms. In the notice the Central Bank (and CSSF) require relevant funds to:

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