Money market funds: Recent developments

In a Press Release dated 20 July 2018 (Press Release 18/24), the CSSF reminded the collective investment funds industry that UCIs that fulfil the criteria set forth in the Money Market Funds ("MMF") Regulation (Regulation (EU) 2017/1131) are within the scope of the MMF Regulation and have to be authorised as MMF.

UCITS and AIFs are required to self-assess whether they are within the scope of the MMF Regulation and they are liable for this assessment. An application questionnaire for MMF is available on the CSSF website. For funds which qualify as MMF within the meaning of the MMF Regulation, the CSSF expects this questionnaire to be completed once the prospectus is filed with the CSSF for review. The CSSF has also published an FAQ on the MMF Regulation.

In addition, the CSSF indicates in its Press Release 18/24 that, in accordance with Article 5 of the MMF Regulation, an AIF can only be authorised as MMF if its AIFM is duly authorised under the AIFM Directive to manage a MMF.

As a consequence, Luxembourg AIFMs will have to obtain prior authorisation by the CSSF before being able to manage MMFs which qualify as AIFs. The CSSF has indicated that a new questionnaire will be published on its website which will have to be completed and sent to the CSSF for approval by all AIFMs which intend to manage MMFs.

The impact that this additional AIFM requirement may have on the timing for a fund to be authorised as MMF will have to be duly considered.

Also on 20 July 2018, the CSSF published CSSF Circular 18/696 which implements the ESMA's Guidelines on stress test scenarios under Article 28 of the MMF Regulation.

As regards the MMF level 2 measures, a Commission delegated act ((EU) 2018/990) was published in the OJEU on 13 July 2018. This delegated act further specifies the requirements applying to MMF which invest in securitisations or asset-backed commercial papers (ABCPs). It also details the requirements for assets received as part of reverse repurchase agreements and the criteria to be used by UCITS management companies and AIFMs when implementing their internal credit quality assessment methodologies.