The IFIA’s call follows the publication earlier this week by the European Commission of proposed new rules to more heavily regulate the so-called “shadow banking” sector, within which money market funds fall.
According to the European Fund and Asset Management Association, around €1trn is invested in money market funds within the EU, representing around 15% of total Ucits assets. These assets are concentrated in three countries – France, Ireland and Luxembourg – accounting for 90% of all money market fund assets at the end of 2012.
Chairman of the IFIA Kevin Murphy, said: “If regulators are concerned that certain types of money market funds present a systemic risk to the global financial markets then clearly a global response is required to address such a risk.
“It follows therefore that imposing different rules in the EU to the rules in the US on the same fund product will not address that global systemic risk. Every effort should be made to ensure that consistent and effective rules are introduced. Having different rules for money market funds in the US and the EU is neither consistent nor effective. The EU proposal for a 3% capital buffer must be reconsidered on that basis.”
