ESMA published a letter by EC on the money market fund (MMF) regulation. The letter is in response to the cover letter of ESMA, which accompanied the November 2017 publication of its final report on Technical advice, draft implementing technical standards, and guidelines under the Money Market Fund (MMF) Regulation. EC had replied to ESMA on January 19.
In its cover letter, ESMA had noted that the views of the Legal Service of the Commission had been sought on the compatibility of the practice of share cancellation, also known as reverse distribution or share destruction, with the MMF Regulation. In its response dated January 19, EC indicates that this practice is not compatible with the Regulation. ESMA is now assessing the consequences of the letter and considering possible next steps, with a view to promoting convergent application of the Regulation across the EU.
Keywords: Europe, EU, Securities, MMF, MMFR, Reverse Distribution Mechanism, EC, ESMA
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