28 Amendments of Matt CARTHY related to 2013/0306(COD)
Amendment 98 #
Proposal for a regulation
Recital 1
Recital 1
(1) Money market funds (MMF) provide, similar to banks and other financial institutions, short-term finance to financial institutions, corporates or governments. By providing finance to these entities, money market funds contribute to the financing of the European economy.
Amendment 106 #
Proposal for a regulation
Recital 4
Recital 4
(4) Large redemption requests force MMFs to sell some of their investment assets in a declining market, fuelling a liquidity crisis. In these circumstances, money market issuers can face severe funding difficulties if the market of commercial papers and other money market instruments dries up. Any contagion to the short term funding market could then also represent direct and major difficulties for the financing of the financial institutions, corporations and governments, thus the economy. In the absence of a credible solution to the too- big-too fail problem for banks this has major implications from an economic stability point of view.
Amendment 109 #
Proposal for a regulation
Recital 6
Recital 6
(6) In order to preserve the integrity and stability of the internal marketduce systemic risk and the possibility of public bail-outs by promoting more resilient MMFs and limiting contagion channels, it is necessary to lay down rules regarding the operation of MMFs, in particular on the composition of the portfolio of MMFs. Uniform rules across the Union are necessary to ensure that MMFs are able to immediately redeem investors, especially during stressed market situations. Uniform rules on the portfolio of a money market fund are also required to ensure that MMFs are able to face massive and sudden redemption requests by a large group of investors.
Amendment 122 #
Proposal for a regulation
Recital 23
Recital 23
(23) Asset Backed Commercial Papers (ABCPs) should not be considered eligible money market instruments to the extent that they respect additional requirements. Due to the fact that during the crisis certain securitisations were particularly unstable, it is necessary to impose maturity limits and quality criteria on the underlying assets. Not all categories of underlying assets should be eligible because some were more confronted to instability than others. For this reason the underlying assets should be exclusively composed of short-term debt instruments that have been issued by corporates in the course of their business activity, such as trade receivables. Instruments such as auto loans and leases, equipment leases, consumer loans, residential mortgage loans, credit card receivables or any other type of instrument linked to the acquisition or financing of services or goods by consumers should not be eligible. ESMA should be entrusted with drafting regulatory technical standards to be submitted for endorsement by the Commission with regard to the conditions and circumstances under which the underlying exposure or pool of exposures is considered to exclusively consist of corporate debt and the conditions and numerical thresholds determining when corporate debt is of high credit quality and liquid, due to the fact that these instruments have proven to be particularly unstable and intransparent.
Amendment 133 #
Proposal for a regulation
Recital 27
Recital 27
(27) In order to limit risk-taking by MMFs it is essential to reduce counterparty risk by subjecting the portfolio of MMFs to clear diversification requirements. To this effect it is also necessary that the reverse repurchase agreements be fully collateralized and that, for limiting the operational risk, one reverse repurchase agreement counterparty cannot account for more than 20% of the MMF's assets. All over-the-counter (OTC) derivatives should be subject to Regulation (EU) No 648/20125. Over-the-counter (OTC) derivatives should not be eligible. __________________ 5 Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (OJ L 201, 27.7.2012, p. 1).
Amendment 171 #
Proposal for a regulation
Recital 44
Recital 44
(44) As a MMF should publish a NAV that reflects all movements in the value of its assets, the published NAV should be rounded at maximum to the nearest basis point or its equivalent. As a consequence, when the NAV is published in a specific currency, for example €1, the incremental change in value should be done every €0.0001. In the case of a NAV at €100, the incremental change in value should be done every €0.01. Only if the MMF is a CNAV MMF, the MMF can publish a price that does not follow entirely the movements in the value of its assets. In this case the NAV can be rounded to the nearest cent for a NAV at €1 (every €0.01 move) for an interim period of five years.
Amendment 196 #
Proposal for a regulation
Recital 47
Recital 47
(47) External support provided to a MMF other than a CNAV MMF with the intention of ensuring either liquidity or stability of the MMF or de facto having such effects increases the contagion risk between the MMF sector and the rest of the financial sector. Third parties providing such support have an interest in doing so, either because they have an economic interest in the management company managing the MMF or because they want to avoid any reputational damage should their name be associated with the failure of a MMF. Because these third parties do not commit explicitly to providing or guaranteeing the support, there is uncertainty whether such support will be granted when the MMF needs it. In these circumstances, the discretionary nature of sponsor support contributes to uncertainty among market participants about who will bear losses of the MMF when they do occur. This uncertainty likely makes MMFs even more vulnerable to runs during periods of financial instability, when broader financial risks are most pronounced and when concerns arise about the health of the sponsors and their ability to provide support to affiliated MMFs. For these reasons, MMFs should not rely on external support in order to maintain their liquidity and the stability of their NAV per unit or share unless the competent authority of the MMF has specifically allowed the external support in order to maintain stability of financial markets.
Amendment 226 #
Proposal for a regulation
Article 1 – paragraph 2
Article 1 – paragraph 2
Amendment 238 #
Proposal for a regulation
Article 2 – paragraph 1 – point 11
Article 2 – paragraph 1 – point 11
(11) ‘amortised cost method’ means a valuation method which takes the acquisition cost of an asset and adjusts this value for amortisation of premiums (or discounts) until maturity; the use of this accounting method shall be subject to approval of national competent authorities;
Amendment 263 #
Proposal for a regulation
Article 3 – paragraph 1 – subparagraph 1 a (new)
Article 3 – paragraph 1 – subparagraph 1 a (new)
An MMF or an MMF manager may be established in a third country provided that the third country is not a country: - where there are no or nominal taxes, - where there is a lack of effective exchange of information with foreign tax authorities, - where there is a lack of transparency in legislative, judicial or administrative provisions, - where there is no requirement for a substantive local presence, - which acts as an offshore financial centre.
Amendment 270 #
Proposal for a regulation
Article 4 – paragraph 1 – subparagraph 1 a (new)
Article 4 – paragraph 1 – subparagraph 1 a (new)
An AIF MMF or an AIFM of a MMF may be established in a third country provided that the third country is not a country: - where there are no or nominal taxes, - where there is a lack of effective exchange of information with foreign tax authorities, - where there is a lack of transparency in legislative, judicial or administrative provisions, - where there is no requirement for a substantive local presence, - which acts as an offshore financial centre.
Amendment 280 #
Proposal for a regulation
Article 8 – paragraph 1 – point c
Article 8 – paragraph 1 – point c
(c) financial derivative instruments used exclusively for hedging purposes;
Amendment 300 #
Proposal for a regulation
Article 9 – paragraph 1 – point d
Article 9 – paragraph 1 – point d
Amendment 307 #
Proposal for a regulation
Article 10 – paragraph 1 – introductory part
Article 10 – paragraph 1 – introductory part
1. A securitisation shall not be considered as eligible provided that all of the following conditions are met:.
Amendment 309 #
Proposal for a regulation
Article 10 – paragraph 1 – point a
Article 10 – paragraph 1 – point a
Amendment 313 #
Proposal for a regulation
Article 10 – paragraph 1 – point b
Article 10 – paragraph 1 – point b
Amendment 316 #
Proposal for a regulation
Article 10 – paragraph 1 – point c
Article 10 – paragraph 1 – point c
Amendment 323 #
Proposal for a regulation
Article 10 – paragraph 2 – subparagraph 1
Article 10 – paragraph 2 – subparagraph 1
Amendment 335 #
Proposal for a regulation
Article 10 – paragraph 2 – subparagraph 2
Article 10 – paragraph 2 – subparagraph 2
Amendment 337 #
Proposal for a regulation
Article 10 – paragraph 2 – subparagraph 3
Article 10 – paragraph 2 – subparagraph 3
Amendment 343 #
Proposal for a regulation
Article 12 – paragraph 1 – introductory part
Article 12 – paragraph 1 – introductory part
A financial derivative instrument shall be eligible for investment by a MMF if it is dealt in on a regulated market referred to in Article 50(1)(a), (b) or (c) of Directive 2009/65/EC or over-the-counter (OTC) , provided that all of the following conditions are in any case fulfilled:
Amendment 346 #
Proposal for a regulation
Article 12 – paragraph 1 – point c
Article 12 – paragraph 1 – point c
(c) the counterparties to OTC derivative transactions are institutions subject to prudential regulation and supervision and belonging to the categories approved by the competent authorities of the MMF's home Member State;
Amendment 349 #
Proposal for a regulation
Article 12 – paragraph 1 – point d
Article 12 – paragraph 1 – point d
(d) the OTC derivatives are subject to reliable and verifiable valuation on a daily basis and can be sold, liquidated or closed by an offsetting transaction at any time at their fair value at the MMF's initiative.
Amendment 352 #
Proposal for a regulation
Article 13 – paragraph 3
Article 13 – paragraph 3
3. Securitisations as defined in Article 10 shall not be received by the MMF as part of a reverse repurchase agreement. The assets received by the MMF as part of a reverse repurchase agreement shall not be sold, reinvested, pledged or otherwise transferred.
Amendment 367 #
Proposal for a regulation
Article 14 – paragraph 2
Article 14 – paragraph 2
Amendment 372 #
Proposal for a regulation
Article 14 – paragraph 3
Article 14 – paragraph 3
3. The aggregate risk exposure to the same counterparty of the MMF stemming from OTC derivative transactions shall not exceed 5% of its assets.
Amendment 382 #
Proposal for a regulation
Article 14 – paragraph 5 – point c
Article 14 – paragraph 5 – point c
(c) OTC financial derivative instruments giving counterparty risk exposure to that body.
Amendment 602 #
Proposal for a regulation
Article 29 – paragraph 2 – point g a (new)
Article 29 – paragraph 2 – point g a (new)
(ga) it shall not be offered to retail investors as defined in Article 4 (11) of Directive 2014/64/EU [MIFID II].