MMF Regulation: ESMA consults on draft technical advice, ITS and guidelines

ESMA has published a consultation paper on draft technical advice, implementing technical standards (ITS) and guidelines under the Money Market Funds (MMF) Regulation.

The draft technical advice relates to the liquidity and credit quality requirements applicable to assets received as part of a reverse repurchase agreement and criteria for:

• the validation of the credit quality assessment methodologies;
• quantification of the credit risk and the relative risk of default of an issuer and of the instrument in which the MMF invests; and
• establishing qualitative indicators on the issuer of the instrument.

The draft ITS relate to development of a reporting template for managers of MMFs to send to competent authorities and the guidelines are intended to set out common reference parameters of the scenarios to be included in the stress tests that managers are required to conduct.

Comments on the consultation are due by 7 August 2017.