FCA sets out proposals to increase liquidity requirements for money market funds

Working with HM Treasury and BoE

Elliot Gulliver-Needham
clock • 3 min read

The Financial Conduct Authority has set out plans to significantly increase the liquidity requirements of money market funds, as part of a consultation developed alongside HM Treasury and the Bank of England.

In a consultation published today (6 December), the regulator unveiled plans to significantly increase the minimum proportion of highly liquid assets that UK money market funds (MMFs) must hold, in an effort to enhance their resilience. The proposals seek to require money market funds' daily and weekly liquid assets levels to rise to 15% and 50% of their assets, respectively. These are increases from a daily level of 7.5% for variable NAV MMFs and 10% for other MMFs, and a weekly level of 15% for variable NAV MMFs and 30% for other MMFs. FCA opens consultation on Overseas Funds Reg...

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