The European Banking Authority is holding a consultation on draft guidelines on limits on exposures to shadow banking entities that carry out banking activities outside a regulated framework under Article 395 of the Capital Requirements Regulation. Under the current draft guidelines, all funds would be considered as falling in the scope of the definition of shadow banking entities except if they are non-MMF UCITS (and third country firms subject to equivalent requirements). All MMFs (being UCITS or AIFs), all AIFs and unregulated funds would fall in scope. The draft guidelines set out requirements for institutions to set limits to their individual exposures to shadow banking entities and to the shadow banking sector in its entirety (so as to minimise the risks from such exposures). The approach aims to ensure that institutions have sufficient information about their counterparties in the shadow banking sector so they can make informed decisions about their exposures. Those institutions without adequate information on their exposures to shadow banking or the capacity to use such information will set an aggregate limit of 25% of their eligible capital.