[ParlTrack]

Proposal for a regulation
Recital 14 a (new)

(14 a) Given that MMFs are established as either UCITS or AIFs and given the importance of cross-border provision of MMFs, it is necessary to ensure that in the event of negative money market rates, public debt CNAV MMFs and LVNAV MMFs can use a reverse distribution mechanism in order to offer returns in line with those negative money market rates while maintaining a constant net asset value. The cancellation of shares in order to counteract the impact of market movements is not permissible in any circumstances.

2018/10/25
Committee: ECON

Brian HAYES, Syed KAMALL

Proposal for a regulation
Article 13 a (new)

Regulation (EU) No 2017/1131
Article 2 – point 23 a (new) and Article 34 – paragraphs 3 a (new) and 3 b (new)

Article 13 a Amendments to Regulation (EU) No 2017/1131 on money market funds Regulation (EU)No 2017/1131 is amended as follows: (1) In Article 2, the following point (23a) is inserted: ‘(23a) “Reverse distribution mechanism” means a mechanism by which public debt CNAV MMFs and LVNAV MMFs are authorised by their investors to redeem a portion of each investors holding in a negative yield environment, subject to certain conditions, thereby allowing for the maintenance of a stable NAV in a negative money market rate environment. (2) In Article 34, the following paragraphs 3a and 3b are inserted: ‘3a. In a negative interest rate environment, the reverse distribution mechanism may, in accordance with paragraph 3b, be used to maintain a stable NAV. The use of the mechanism to reduce the impact of market movements, or any factor other than negative yield, on the net asset value of the MMF, is prohibited. 3b. A reverse distribution mechanism may only be utilised where use of the mechanism is set out in fund rules and approved by the national competent authority of the MMF and provide that: (a) on the date of purchase, the value of investments are separated between capital and income value; (b) the full portfolio of the MMF is published daily in a format showing the capital and income value of each investment; and (c) any reduction in shares as a result of the operation of the reverse distribution mechanism cannot exceed in value the negative yield accrued by the MMF since the last valuation point.’

2018/10/25
Committee: ECON

Brian HAYES

Proposal for a regulation
Article 13 b (new)

Regulation (EU) No 1286/2014
Article 32 – paragraph 1, Article 33 – paragraphs 1, 2 and 4

Article 13 b Amendment to Regulation (EU) No 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) Regulation (EU) No1286/2014 is amended as follows: (1) in Article 32(1),“31 December 2019” is replaced by “31 December 2021”; (2) in Article 33(1),“31 December 2018” is replaced by “31 December 2019”; (3) in Article 33(2),“31 December 2018” is replaced by “31 December 2019”; (4) in Article 33(4),“31 December 2018” is replaced by “31 December 2019”.

2018/10/25
Committee: ECON

3 Amendments of Brian HAYES related to 2018/0045(COD)

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