The European Funds and Asset Management Association and the Institutional Money Market Funds Association have welcomed the Committee of European Securities Regulators’ definition of a European money market fund.

The definition includes detailed guidelines regarding the management and operation of a money market fund.

Following on from the publication of these guidelines, each country will need to implement the common characterisation of European money market funds in its domestic financial services legislation.

Once this has been accomplished, the harmonised definition will enable investors to compare money market funds across Europe on a like-for-like basis.
 
Peter de Proft (pictured), director general of Efama, says: "We truly welcome the definition of money market funds and commend CESR on their excellent work. Creating the first pan-European definition of a money market fund will provide investors with much needed guidance regarding money market funds. The two categories will allow investors to choose between funds with differing objectives, whilst also specifying what may be included in a money market fund. We look forward to continuing to work closely with CESR.”
 
Gail Le Coz, chief executive of Immfa, adds: “These guidelines seek to improve investor protection. Immfa fully supports and shares that goal, as evidenced by the amendments which we made to our Code of Practice in December 2009. This set of best practice standards for the management and operations of triple-A rated money market funds includes provisions to limit interest rate, credit and liquidity risk and imposes additional disclosure obligations on funds. In many ways, the short-term category reflects the practices that our members have employed for some time.”