The EU Council has reached provisional agreement with representatives of the European Parliament on the proposed Regulation on Money Market Funds (MMF Regulation). The Council explains that while an overall agreement has been reached at the political level, a number of technical issues relating to the MMF Regulation are to be finalised "in the coming days". The Council has confirmed, however, that the agreement covers, in particular, the core issues concerning the regulation of MMFs, such as liquidity and diversification requirements, assets in which MMFs can invest (including the role of government debt) and transparency. The MMF Regulation is designed to ensure the smooth operation of the short-term funding market and follows efforts by the G20 and the Financial Stability Board to strengthen the oversight and regulation of the shadow banking system.