UK to reform Money Market Fund Regulations regime

The UK government and UK Financial Conduct Authority (FCA) have published a policy paper announcing plans to reform the UK Money Market Fund Regulation (MMFR) regime, aimed at strengthening money market funds (MMFs) to better withstand periods of market disruption. The reforms are intended to replace the existing regime with a new framework under which most requirements for UK MMFs will be set out in FCA rules and guidance, including expectations for higher levels of liquidity. The government confirms it will introduce legislation when parliamentary time allows, with the new regime expected to be in place by Q4 (subject to parliamentary approval). The FCA is expected to issue a statement shortly with further details on its plans. The government also acknowledges the cross-border nature of MMFs, welcoming ongoing engagement with the EU and the European Commission's report published on 11 May. The government intends to extend the temporary marketing permissions regime, pending a longer-term solution on market access, in line with the UK's framework and process for recognition of overseas firms and funds.

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