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Stress Testing requirements for Money Market Funds

05/09/2019

On 19 July 2019, the European Securities and Markets Authority (ESMA) issued two sets of guidelines regarding the stress testing of money market funds and reporting on money market funds to national competent authorities, aimed at ensuring a coherent application of the Money Market Fund (MMF) Regulation.

The Guidelines on stress testing establish common reference parameters of the stress test scenarios MMFs or managers of MMFs should include in their stress scenarios. The Guidelines on reporting provide guidance on how to fill in the reporting template on money market funds that managers of MMFs will transmit to competent authorities as of Q1 2020. The guidelines will be updated at least every year and will take into account the latest market developments. The current guidelines include the calibration of the stress test scenarios for 2019.

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