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Cash & Liquidity Management
Published  5 MIN READ

Getting to Grips with the New European MMF Rules

With the European Money Market Fund (MMF) Regulations set for implementation in just over a year’s time, Jim Fuell explains how he and his team are helping their clients to understand their options under the changes that the new regime will bring.


The recently approved European Money Market Fund (MMF) Regulations have introduced several new structures for short-term MMFs. What options do you intend to offer your clients? 

The new regulations set out three new structures for short-term MMFs: public debt Constant Net Asset Value (CNAV), Low Volatility Net Asset Value (LVNAV) and Variable Net Asset Value (VNAV). Under the new rules, the line-up of our liquidity fund range will be changing, but the new regulation will not change the investment profiles of the funds or our investment philosophy. Figure 1 gives  a summary of the fund range options we intend to offer in the short-term space for USD, GBP and EUR investors. We continue to evaluate additional structural options and currencies, and will communicate with investors as these evolve.

Our investors have indicated that their preferred option for government investment is the public debt CNAV MMF, while the most popular option for credit or prime-style liquidity investors is the LVNAV structure. We will work to transition our existing range to the new structures in a way that minimises the impact for clients. Alongside the public debt CNAV and LVNAV structures, we also intend to introduce VNAV short-term MMFs for investors who prefer the features offered by this structure under the new regulations, or who may prefer to avoid the structured fees and gates that come with both the CNAV public debt and LVNAV MMFs.