EU Money Market Fund Regulation and Share Cancellation: A Last-Minute Threat to Stable-Price MMFs?

Just as European corporate treasurers were starting to prepare for the entry into force of the EU Money Market Fund (MMF) Regulation and to understand the implications of the changes brought by it, a new obstacle has emerged that might put into question some of the fundamental aspects of the Regulation. The European Commission is indeed currently assessing whether share cancellation fits into the new EU legal framework and whether the practice should be banned altogether. It is highly uncertain whether negative-yielding funds that seek to maintain a stable asset price would survive a prohibition of the share cancellation practice.