On June 11, the Money Market Funds Regulations 2018 (MMFR) were published and set to go into effect on July 21. The MMFR relates to the EU Regulation on Money Market Funds (EU MMF Regulation), and ensures the UK Financial Conduct Authority (FCA) can authorize money market funds (MMFs) and enforce the MMFR from the day that the EU MMF Regulation goes into effect.
The MMFR amends the Financial Services and Markets Act 2000 (FSMA) to allow the FCA to authorize funds as MMFs, as well as to exercise regulatory powers over MMFs. It further amends FSMA to grant the FCA powers to authorize, and intervene in respect of, unit trusts and contractual schemes (both being subsets of MMFs).
The MMFR also introduces changes to the following delegated legislation:
- Open-Ended Investment Companies Regulations 2001 to permit open-ended investment companies (OEICs) to apply to become MMFs, or those applying to be OEICs to simultaneously apply to be authorized as an MMF;
- Alternative Investment Fund Managers Regulations 2013 to enable the FCA to prescribe the application process for an alternative investment fund (AIF) to be authorized as an MMF, the procedure for refusal of an application and the process if the FCA decides to revoke authorization of an AIF which is an MMF; and
- Financial Services and Markets Act 2000 (Qualifying EU Provisions) Order 2013 to enable the FCA to investigate and bring enforcement action against funds directly for breach of the EU MMF Regulation.