Money Market Funds (MMFs)

Investment funds making use of the label Money Market Funds (“MMFs”) must comply with Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds (“MMFR”).

Besides the specific provisions and characteristics of an MMF according to the MMFR, an MMF must also satisfy the standard characteristics and regulatory conditions related to the investment fund type adopted by the MMF, either an undertaking of collective investment in transferable securities (“UCITS”) or an alternative investment fund (“AIF”).

The MMF regulation applies to investment funds established, managed or marketed in the European Union fulfilling the following requirements:

• authorised or having requested authorisation as a UCITS according to Part I of the Law of 17 December 2010 relating to undertakings of collective investment or qualifying as AIFs according to the Law of 12 July 2013 on alternative investment fund managers;
• investing in short-term assets; and
• having distinct or cumulative objectives offering returns in line with money market rates or preserving the value of the investment.

A UCITS or an AIF shall not have characteristics which are substantially similar to those referred to as an MMF, unless it has been authorised as an MMF in accordance with the MMFR.

It is the responsibility of the investment fund to assess whether it will fulfill the aforementioned criteria and requirements before submitting a request for authorisation as an MMF in scope of the MMFR.

Assessment in view of authorisation as an MMF for Luxembourg domiciled UCITS or AIFs, as well as non-EU AIFs for which the CSSF will be the competent authority in accordance with the MMFR, is the responsibility of the CSSF upon receipt of the dedicated form that is available under Forms.

AIFs with the characteristics of MMFs can only be authorised by the CSSF if the alternative investment manager (“AIFM”) is authorised in accordance with Directive 2011/61/EU and specifically authorised by its competent authority to manage MMFs that are AIFs.

More information in relation to the authorisation process of an investment fund (not specifically related to MMFR) is available via the Investment funds and vehicles page.

This approval process comprises the approval of any amendment to an existing MMF or to one or several of its sub-fund(s).

A non-exhaustive list of examples of amendments falling under this process:

• Launch of additional MMF sub-fund(s) to an existing MMF
• Change of type of an existing MMF (VNAV, public debt CNAV or LVNAV)
• Withdrawal of an existing MMF from the scope of the MMFR

For the launch of additional MMF sub-fund(s) to an existing MMF, the dedicated form available under Forms must be provided to the CSSF with any relevant information for the examination of the application for approval.

For other amendments, the applicant must provide the CSSF with any relevant information for the examination of the request. Because of the variety of possible amendments and, hence, the variety of information that changes accordingly, no form is currently available for provision of the relevant information.

More information related to the amendment process of the investment fund (not specifically related to MMFR) is available via the Investment funds and vehicles page.

In accordance with Chapter 3 of the Law of 16 July 2019 implementing the Regulations on EuVECA, EuSEF, MMF, ELTIF and STS securitisation and Circulars CSSF 20/734, CSSF 20/735 and CSSF 20/736, CSSF-supervised managers of money market funds must report financial information to the CSSF on a quarterly or yearly basis.

The Commission Implementing Regulation (EU) 2018/708 of 17 April 2018 defines technical standards with regard to the template to be used by managers of money market funds when reporting to competent authorities as stipulated by Article 37 of Regulation (EU) 2017/1131.

The European Securities and Markets Authority (ESMA) has published money market fund reporting – technical reporting instructions (related to technical reporting instructions, detailed validation rules and the reporting XSD schema) (Ref. ESMA/65-8-6480).

In addition, on 19 July 2019 ESMA published the “Guidelines on the reporting to competent authorities under Article 37 of the MMF Regulation (Ref. ESMA/34-49-168)”.

Moreover, a specific version of the auth.093.001.001 ISO20022 message definition must be used by managers of money market funds.

The information to be submitted corresponds to the common European reporting as developed by ESMA and should be sent via the transmission channels in XML format.