BETA

17 Amendments of Gay MITCHELL related to 2013/0306(COD)

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 ormitigate client redemptions in times of severe market stress, whereby investors are given the choice in investing in either VNAV or CNAV MMFs whilst ensuring CNAV MMF managers perform their fiduciary duty of treating all share should ~~be neutralized by using~~ers equally, the CNAV 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 acMMF shall have in place redemption gate and / or fee provisions to ensure "early redeemers" do not redeem in periods of extreme market conditions, leaving other investors unfairly exposed to the then prevailing market conditions.

2013/12/12
Committee: ECON

Proposal for a regulation
Recital 46

(46) A~~s a~~ CNAV MMF ~~that does not maintain the NAV buffer at the required level is not capable of sustaining a constant NAV per~~ which cannot meet the minimum amounit o~~r share, it should be required to fluctuate the NAV and~~f weekly liquidity requirements shall cease to be a CNAV MMF. Therefore, where despite the use of the ~~escalation procedure the amount of~~redemption gate, the CNAV ~~buffer remains for one month below the~~MMF has not been requpaired ~~3% by 10~~within 7 bausi~~s point~~ness days, 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~~variable NAV MMF or be liquidated. If a liquidity fee is implemented it may remain in place at least until the MMF meets the minimum weekly liquidity requirements. If a competent authority has justifiable reasons demonstrating the in~~capac~~ability 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~~meet certain conditions, such conditions to be determined by the competent authorities, it should have the power to request the MMF manager to either convert the CNAV MMF into a MMF other than a CNAV MMF or to liquidate the CNAV MMF.

2013/12/12
Committee: ECON

Proposal for a regulation
Recital 54

(54) It is essential to carry out a review of this Regulation in order to assess the appropriateness of exempting certain CNAV MMFs that concentrate their investment portfolios on debt issued by the Member States from the requirement to establish a capital buffer that amounts to at least 3 % of the total value of the CNAV MMF's assetthe proposals. Therefore, during the three years after the entry into force of this Regulation, the Commission should analyse the experience acquired in applying this Regulation and the impacts on the different economic aspects attached to the MMFs. The debt issued or guaranteed by the Member States represents a distinct category of investment displaying specific credit and liquidity traits. In addition, sovereign debt plays a vital role in financing the Member States. The Commission should evaluate the evolution of the market for sovereign debt issued or guaranteed by the Member States and the possibility to create a special framework for MMF that concentrate their investment policy on that type of debt.

2013/12/12
Committee: ECON

Proposal for a regulation
Article 2 – point 22 a (new)

(22a) "gates" or "gating" means the ability of an MMF to impose restrictions on the right of shareholders or unitholders to redeem their shares or units in an MMF on any dealing day;

2013/12/12
Committee: ECON

Proposal for a regulation
Article 2 – point 22 b (new)

(22b) "a liquidity fee" means a fee imposed by an MMF on shareholders or unitholders redeeming their shares or units in the MMF which is intended to ensure that costs associated with such redemptions are borne by the redeeming shareholders or unitholders;

2013/12/12
Committee: ECON

Proposal for a regulation
Article 25 – paragraph 2

2. In addition, in the case of CNAV MMFs, the stress tests shall estimate for different scenarios the difference between the constant NAV per unit or share and the NAV per unit or share~~, including the impact of the difference on the NAV buffer~~.

2013/12/12
Committee: ECON

Proposal for a regulation
Article 29 – paragraph 1

1. A CNAV MMF shall ~~not use the amortised cost metho~~have redemption gate and / or fee provisions, to be determined by ESMA. The MMF board for ~~valuation, or advertise a constant NAV per unit or share, or round the constant NAV per unit or share to the nearest percentage point or its equivalent when~~management company shall implement redemption gates and / or fees once a trigger is breached. The trigger to apply redemption gates and / or fees should be when the level of weekly liquidity falls below 10%. The redemption fee should be set to ensure that remaining shareholders do not suffer the liquidity costs of redeeming shareholders. If a gate is implemented and it has not repaired the CNAV MMF within 7 business days, the CNAV ~~is published in a currency unit unless it has been explicitly authorised as a CNAV MMF~~MMF shall convert to a VNAV MMF or be liquidated. If a redemption fee is implemented, it may remain in place until the minimum weekly liquidity level is achieved. The MMF board or management company may implement a redemption gate and / or a fee before the trigger is met if it believes it is in the best interest of shareholders to do so.

2013/12/12
Committee: ECON

Proposal for a regulation
Article 29 – paragraph 2

2. A CNAV MMF shall satisfy all the following additional requirements: (a) it has established a NAV buffer in accordance with the requirements in Article 30; (b) the competent authority of the CNAV MMF is satisfied with a detailed plan by the CNAV MMF specifying the modalities of the use of the buffer in accordance with Article 31; (c) the competent authority of the CNAV MMF is satisfied with the CNAV MMF's arrangements to replenish the buffer and with the financial strength of the entity expected to fund the replenishment; (d) the rules or instruments of incorporation of the CNAV MMF provide clear procedures for the conversion of the CNAV MMF into a MMF that is not allowed to use the amortised cost accounting or the rounding methods; (e) the CNAV MMF and its manager have clear and transparent governance structures that unambiguously identify and assign responsibilities for the different governance levels; (f) the CNAV MMF has established clear and effective communication tools towards investors that ensure prompt information in relation to any use or replenishment of the NAV buffer and the conversion of the CNAV MMF; (g) the rules or instruments of incorporation of the CNAV MMF state clearly that the CNAV MMF cannot receive external support other than through the NAV buffer.deleted

2013/12/12
Committee: ECON

Proposal for a regulation
Article 30

~~[...]~~deleted

2013/12/12
Committee: ECON

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

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

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

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

Proposal for a regulation
Article 37 – paragraph 5

5. In addition to the information to be provided in accordance with paragraphs 1 to 4, a CNAV MMF shall explain clearly to investors and potential investors the use of the amortised cost method and/or of rounding. A CNAV MMF shall indicate the amount of its NAV buffer, the procedure to equalise the constant NAV per unit or share and the NAV per unit or share and shall state clearly the role of the buffer and the risks related to it. The CNAV MMF shall clearly indicate the modalities of replenishing the NAV buffer and the entity expected to fund the replenishment. It shall make available to investors all information concerning compliance with the conditions set out in Article 29(2)(a) to (g)procedure to apply liquidity fees and /or gates and the circumstances under which these will be triggered.

2013/12/12
Committee: ECON

Proposal for a regulation
Article 43 – paragraph 3

3. By way of derogation from the first sentence of Article 30(1), an existing UCITS or AIF that meets the criteria for the definition of a CNAV MMF set out in Article 2(10) shall establish a NAV buffer of at least (a) 1% of the total value of the CNAV MMF's assets, within one year from the entry into force of this Regulation; (b) 2% of the total value of the CNAV MMF's assets, within two years from the entry into force of this Regulation; (c) 3% of the total value of the CNAV MMF's assets, within three years from the date of entry into force of this Regulationdeleted

2013/12/12
Committee: ECON

Proposal for a regulation
Article 43 – paragraph 4

4. For the purposes of paragraph 3 of this Article, the reference to 3% in Articles 33 and 34 shall be interpreted as referring to the amounts of the NAV buffer mentioned in points (a), (b) and (c) of paragraph 3 respectively.deleted

2013/12/12
Committee: ECON

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