[ParlTrack]

Proposal for a regulation
Recital 45

(45) In order to be able to absorb day-to- day fluctuations in the value of a CNAV MMF's assets and allow it to offer a constant NAV per unit or share, the CNAV MMF should have at all times a NAV buffer amounting to at least 3% of its assets. The NAV buffer should serve as an absorbing mechanism for maintaining the constant NAV. All differences between the constant NAV per unit or share and the NAV per unit or share should be neutralized by using the NAV buffer. During stressed market situations, when the differences can rapidly increase, a procedure should ensure that the whole chain of management is involved. This escalation procedure should permit the senior management to take rapid remedy actions.deleted

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Recital 46

(46) As a CNAV MMF that does not maintain the NAV buffer at the required level is not capable of sustaining a constant NAV per unit or share, it should be required to fluctuate the NAV and cease to be a CNAV MMF. Therefore, where despite the use of the escalation procedure the amount of the NAV buffer remains for one month below the required 3% by 10 basis points, the CNAV MMF should automatically convert into a MMF that is not allowed to use amortised cost accounting or rounding to the nearest percentage point. If before the end of the one month allowed for the replenishment a competent authority has justifiable reasons demonstrating the incapacity of the CNAV MMF to replenish the buffer, it should have the power to convert the CNAV MMF into a MMF other than a CNAV MMF. The NAV buffer is the only vehicle through which external support to a CNAV MMF can be provided.deleted

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Article 13 – paragraph 4

4. The assets received by the MMF as part of a reverse repurchase agreement shall not be included for the purpose of calculating the limits on diversification and concentration laid down in this Regulation.

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Article 13 – paragraph 5 – subparagraph 2

~~The assets received as part of a reverse repurchase agreement according to the first subparagraph shall be disclosed to the MMF investors.~~deleted

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Article 26 – paragraph 4 – subparagraph 3

~~When marking to model, no valuation models based on amortised cost shall be used.~~deleted

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Article 26 – paragraph 5

5. In addition to the marking to market method referred to in paragraphs 2 and 3 and marking to model method referred to in paragraph 4, the assets of a ~~CNAV~~n MMF may also be valued by using the amortised cost method. where its board of directors or the board of directors of its management company determines in good faith that the methodology reflects accurately the fair value of the relevant money market instruments held in the portfolio in accordance with generally accepted accounting principles. Where it is considered that amortization method can be used to fairly assess the value of a money market instrument, it must ensure that this will not result in a material discrepancy between the value of the money market instrument and the value calculated according to the amortization method. The following MMF/MMI will comply with the latter principles: • money market instruments with a residual maturity of less than 60 days and with no specific sensitivity to market parameters, including credit risk; or • MMF investing solely in high-quality instruments with as a general rule a maturity or residual maturity of at most 397 days or regular yield adjustments in line with the maturities mentioned before and with a weighted average maturity of 60 days. The requirement that the instruments be high-quality instruments should be adequately monitored, taking into account both the credit risk and the final maturity of the instrument. These principles along with adequate procedures defined by the MMF should avoid the situation where discrepancies between the value of the money market instrument and the value calculated according to the amortization method would become material, whether at the individual money market instrument or at the MMF level. These procedures might include updating the credit spread of the issuer or selling the money market instrument.

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Article 29 – paragraph 2 – introductory part

2. A CNAV MMF shall ~~satisfy all the following additional requirements:~~ have in place redemption gate and/or fee provisions. The CNAV MMF board or management company shall decide whether to implement redemption gates and/or fees once a trigger is breached. These mechanisms should be set to ensure that shareholders remaining in the CNAV MMF do not suffer the liquidity costs of redeeming shareholders. If the redemption gate and/or fee have not repaired the CNAV MMF within 30 days, the CNAV MMF shall convert to a VNAV MMF or be liquidated. ESMA shall determine the nature of the trigger for redemption gates and/or fees and the calculation of the redemption fee.

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Article 30

~~[...]~~deleted

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Article 31

Article 31 Use of the NAV buffer 1. The NAV buffer shall only be used in case of subscriptions and redemptions to equalise the difference between the constant NAV per unit or share and the NAV per unit or share. 2. For the purposes of paragraph 1, in case of subscriptions: (a) where the constant NAV at which a unit or share is subscribed is higher than the NAV per unit or share, the positive difference shall be credited to the reserve account; (b) where the constant NAV at which a unit or share is subscribed is lower than the NAV, the negative difference shall be debited from the reserve account. 3. For the purposes of paragraph 1, in case of redemptions: (a) where the constant NAV at which a unit or share is redeemed is higher than the NAV per unit or share, the negative difference shall be debited from the reserve account; (b) where the constant NAV at which a unit or share is redeemed is lower than the NAV per unit or share, the positive difference shall be credited to the reserve account.deleted

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Article 32

Article 32 Escalation procedure 1. A CNAV MMF shall establish and implement an escalation procedure that ensures that the negative difference between the constant NAV per unit or share and the NAV per unit or share is considered by persons competent to act for the fund in a timely manner. 2. The escalation procedure shall require that: (a) where the negative difference reaches 10 basis points or its equivalent when the NAV is published in a currency unit, the senior management of the manager of the CNAV MMF be informed; (b) where the negative difference reaches 15 basis points or its equivalent when the NAV is published in a currency unit, the board of directors of the manager of the CNAV MMF, the competent authorities of the CNAV MMF and ESMA be informed; (c) the competent persons assess the cause of the negative difference and take appropriate action to reduce the negative effects.deleted

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Article 33

Article 33 Replenishment of the NAV buffer 1. Whenever the amount of the NAV buffer falls below 3% it shall be replenished. 2. When the NAV buffer has not been replenished and for one month the amount of the NAV buffer stays below the 3% referred to in Article 30(1) by 10 basis points the MMF shall automatically cease to be a CNAV MMF and be prohibited from using the amortised cost or rounding methods. The CNAV MMF shall inform immediately each investor thereof in writing and in a clear and comprehensible way.deleted

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Article 34

Article 34 Powers of the competent authority concerning the NAV buffer 1. The competent authority of the CNAV MMF shall be immediately notified of any decrease below 3% in the amount of the NAV buffer. 2. The competent authority of the CNAV MMF and ESMA shall be immediately notified when the amount of the NAV buffer decreases by 10 basis points below the 3% referred to in Article 30(1). 3. Following the notification referred to in paragraph 1, the competent authority shall closely monitor the CNAV MMF. 4. Following the notification in paragraph 2, the competent authority shall control that the NAV buffer has been replenished or the MMF has ceased to hold itself as a CNAV MMF and informed accordingly its investors.deleted

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Article 43 – paragraph 1

1. Within the ~~six~~24 months following the date of entry into force of this Regulation, an existing UCITS or AIF that invests in short term assets and has as distinct or cumulative objectives offering returns in line with money market rates or preserving the value of the investment shall submit an application to its competent authority together with all documents and evidence necessary to demonstrate the compliance with this Regulation.

2013/12/12
Committee: ECON

Astrid LULLING

Proposal for a regulation
Article 45 – paragraph 1 – introductory part

By three years after the entry into force of this Regulation, the Commission shall review the adequacy of this Regulation from a prudential and economic point of view. In particular the review shall consider the operation of the CNAV buffer and the operation of the CNAV buffer to those CNAV MMFs that, in future, might concentrate their portfolios on debt issued or guaranteed by the Member States. The review shall:

2013/12/12
Committee: ECON

14 Amendments of Astrid LULLING related to 2013/0306(COD)

ParlTrack - 2011-2024