BETA

Activities of Alain CADEC related to 2013/0306(COD)

Plenary speeches (1)

2016/11/22
Dossiers: 2013/0306(COD)

Amendments (75)

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Recital 23

(23) Asset Backed Commercial Papers (ABCPs) should 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~~In particular those securitizations where the underlying assets were associated with supporting the working capital of manufacturers and the sales of real economy goods and services, performed well and should be eligible. For this reason ~~the~~ABCP backed by 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 composed of debt instruments that have been originated by bank clients, such as corporates or their captive financial subsidiaries, in the course of their business activity, including trade receivables, or other related debt held directly or indirectly, should be eligible for MMF investment. In this regard, instruments which provide working capital to bank clients, such as trade receivables, auto loans and leases, equipment loans and leases, SME loans and consumer loans should be eligible provided they are of high quality, liquid and otherwise satisfy maximum weighted average life (WAL) requirement. 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 considered to consist of eligible debt and the conditions and numerical threshould ~~not be eligible~~s determining when such eligible debt is of high credit quality and liquid. 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~~consist of debt and the conditions and numerical thresholds determining when ~~corporate~~ debt is of high credit quality and liquid.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Recital 39

(39) It is important that the risk management of MMFs not be biased by short-term decisions influenced by the possible rating of the MMF. Therefore, it is necessary to prohibit a MMF or its manager from requesting that the MMF is rated by a credit rating agency in order to avoid that this external rating is used for marketing purposes. The MMF or its manager should also refrain from using alternative methods for obtaining a rating of the MMF. Should the MMF be awarded an external rating, either on the own initiative of the credit rating agency or following request by a third party that is independent of the MMF or the manager and does not act on behalf of any of them, the MMF manager should refrain from relying on criteria that would be attached to that external rating. For ensuring appropriate liquidity management it is necessary that the MMFs establish sound policies and procedures to know their investors. The policies that the manager has to put in place should help understanding the MMF's investor base, to the extent that large redemptions could be anticipated. In order to avoid that the MMF faces sudden massive redemptions, particular attention should be paid to large investors representing a substantial portion of the MMF's assets, as with one investor representing more than the proportion of daily maturing assets. ~~In this case the MMF should increase its proportion of daily maturing assets to the proportion of that investor.~~ The manager should whenever possible look at the identity of the investors, even if they are represented by nominee accounts, portals or any other indirect buyer.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Recital 42

(42) Constant Net Asset Value MMFs (CNAV MMFs) have the objective of preserving the capital of the investment while ensuring a high degree of liquidity. The majority of CNAV MMFs have a net asset value (NAV) per unit or share set, for example, at 1 €, $ or £ when they distribute the income to the investors. The others accumulate income in the NAV of the fund while maintaining the intrinsic value of the asset at a constant value.deleted

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Recital 42 a (new)

(42a) 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.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Recital 43

(43) To allow for the specificities of CNAV MMFs it is necessary that CNAV MMFs be permitted to use also the amortised cost accounting method for the purpose of determining the constant net asset value (NAV) per unit or share. This notwithstanding, for the purpose of ensuring at all times the monitoring of the difference between the constant NAV per unit or share and the NAV per unit or share, a CNAV MMF should also calculate the value of its assets on the basis of the marking to market or marking to model methods.deleted

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Recital 43 a (new)

(43a) External support provided to a 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.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
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).

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Recital 44 a (new)

(44a) Investors should be clearly informed, before they invest in a MMF, if the MMF is of a short-term nature or of a standard nature. In order to avoid misplaced expectations from the investor it must also be clearly stated in any marketing document that MMFs are not a guaranteed investment vehicle.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

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

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

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

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
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.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Recital 48

(48) Investors should be clearly informed, before they invest in a MMF, if the MMF is of a short-term nature or of a standard nature ~~and if the MMF is of a CNAV type or not~~. In order to avoid misplaced expectations from the investor it must also be clearly stated in any marketing document that MMFs are not a guaranteed investment vehicle. ~~CNAV MMFs should clearly explain to investors the buffer mechanism they are applying to maintain the constant NAV per unit or share.~~

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Recital 50 a (new)

(50a) 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.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 2 – paragraph 1 – point 2

(2) ‘money market instruments’ means money market instruments as defined in Article 2(1)(o) of Directive 2009/65/EC and Article 3 of Directive 2007/16/EC;

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 2 – paragraph 1 – point 8

(8) ~~‘corporat~~"eligible debt’" means debt instruments issued by anentities or undertakings ~~which is~~ effectively engaged in producing ~~or trading~~ and/or financing the manufacturing, trading or providing goods ~~or non-financial services;~~and non-financial services to the market including corporate debt. For the purpose of this definition, it should be understood, that entities such as captive finance subsidiaries are consistent with this definition and that debt instruments such as trade receivables, auto loans and leases, equipment loans and leases, SME loans and consumer loans of such undertakings are eligible provided they otherwise comply with the conditions set out in this Regulation.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 2 – paragraph 1 – point 12

(12) ‘constant Net Assets Value Money Market Fund’ (CNAV MMF) means a money market fund that maintains an unchanging value NAV per unit or share; where income in the fund is accrued daily or can either be paid out to the investor, and where assets are generally valued according to the amortised cost method or the NAV is rounded to the nearest percentage point or its equivalent in currency term;deleted

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 2 – paragraph 1 – point 12 a (new)

(12a) "Short-term MMF" means a money market fund that invests in eligible money market instruments referred to in Article 9(1);

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 8 – paragraph 1 – point d a (new)

(da) repurchase agreements;

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 8 – paragraph 1 – point d b (new)

(db) units or shares of other MMFs;

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 10 – paragraph 1 – point –a (new)

(-a) the Asset Backed Commercial Paper has a legal maturity at issuance or a residual maturity of 397 days or less;

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 10 – paragraph 1 – point a

(a) the underlying exposure or pool of exposures consists exclusively of ~~corporat~~eligible debt;

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 10 – paragraph 1 – point b

(b) the ~~underlying corporat~~eligible debt is of high credit quality and liquid;

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 10 – paragraph 1 – point c

(c) the underlying ~~corporate debt has a legal maturity at issuance of 397 days or less; or has a residual maturity~~exposure or pool of exposures has a weighted average life (WAL) of 397 days or less.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 10 – paragraph 2 – subparagraph 1 – point a

(a) the conditions and circumstances under which the underlying exposure or pool of exposures is considered to exclusively consist of ~~corporat~~eligible debt;

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 10 – paragraph 2 – subparagraph 1 – point b

(b) conditions and numerical thresholds determining when ~~corporat~~eligible debt is of high credit quality and liquid.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 13 a (new)

Article 13 a Eligible repurchase agreements A repurchase agreement shall be eligible to be entered into by a MMF provided that all the following conditions are fulfilled: (a) the repurchase agreement is used on a temporary basis (for a maximum of 7 business days) and not for investment purposes; (b) the cash received by the MMF as part of repurchase agreements shall not exceed 10% of its assets and shall not be invested in eligible assets; (c) the MMF shall have the right to terminate the agreement at any time upon a notice of maximum two working days;

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 13 b (new)

Article 13 b Eligible MMFs 1. A MMF may acquire the units or shares of other MMFs provided that no more than 10 % of the assets of the MMF whose acquisition is contemplated, can, according to their fund rules or instruments of incorporation, be invested in aggregate in units or shares of other MMFs. 2. A MMF may acquire the units or shares of other MMFs, provided that no more than 5 % of its assets are invested in units of a single MMF. 3. Member States may provide that, where a MMF has acquired units of another MMF, the assets of the acquired MMF are not required to be combined with the assets of the acquiring MMF for the purposes of the diversification limits laid down in Article 14. 4. MMF investing in units or shares of other MMFs shall comply with the provisions set out under Articles 50(1)(e)(iv) and 55 of Directive 2014/91/UE ("the UCITS Directive"). 5. The provisions of paragraphs 1 and 2 do not apply to feeder MMFs. 6. Short-term MMFs may only invest in units of other short-term MMFs and Standard MMFs may invest in units of both Short-term MMFs and Standard MMFs. 7. UCITS MMFs may only invest in units of other UCITS MMFs and non-UCITS MMFs may invest in both UCITS and non-UCITS MMFs.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 14 – paragraph 7 a (new)

7 a. Member States may allow cumulative investment in transferable securities and money market instruments within the same group up to a limit of 20%.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 16 – paragraph 3 – point b

(b) a manager of a MMF shall adopt and implement adequate measures to ensure that the assignment of its internal ratings is based on a thorough analysis of ~~all~~ the information that is available and pertinent, and includes ~~all~~ relevant driving factors that influence the creditworthiness of the issuer;

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 16 – paragraph 3 – point d

(d) where a credit rating agency registered with the European Securities and Market Authority (ESMA) assigns a credit rating to an issuer of money market instruments, the downgrade below the two highest short term credit ratings used by that agency shall be considered to be material change for the purposes of point (c) and require the manager to undertake a new assignment procedure;deleted

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 21 – paragraph 1 – introductory part

1. A short-term MMF shall comply at all times with all of the following portfolio requirements:

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 21 – paragraph 1 – point c

(c) at least 10% of its assets shall be comprised of daily maturing assets. A short-term MMF shall not acquire any asset other than a daily maturing asset when such acquisition would result in the short-term MMF investing less than 10% of its portfolio in daily maturing assets;deleted

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 21 – paragraph 1 – point d

(d) at least 20% of its assets shall be comprised of weekly maturing assets. A short-term MMF shall not acquire any asset other than a weekly maturing asset when such acquisition would result in the short-term MMF investing less than 20% of its portfolio in weekly maturing assets.deleted

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 21 – paragraph 1 a (new)

1a. A short-term MMF shall hold : (a) at least 10% of its assets in the form of daily maturing assets; (b) at least 15% of its assets in the form of weekly maturing assets. In cases where larger-than-expected redemption requests lead to fall below the abovementioned ratios, managers of short-term MMFs should take action to remedy the breach in a timely manner, and in doing so, should take due account of the interests of its unit-holders. Investment in units or shares of other Short-term MMFs may be included in the ratio of weekly maturing assets up to a maximum of 5% of the assets of the MMF.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 22 – paragraph 1 – point c

(c) at least 10% of its assets shall be comprised of daily maturing assets. A standard MMF shall not acquire any asset other than a daily maturing asset when such acquisition would result in the standard MMF investing less than 10% of its portfolio in daily maturing assets;deleted

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 22 – paragraph 1 – point d

(d) at least 20% of its assets shall be comprised of weekly maturing assets. A standard MMF shall not acquire any asset other than a weekly maturing asset when such acquisition would result in the standard MMF investing less than 20% of its portfolio in weekly maturing assets.deleted

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 22 – paragraph 1 a (new)

1 a. A standard MMF shall hold : (a) at least 10% of its assets in the form of daily maturing assets; (b) at least 15% of its assets in the form of weekly maturing assets. In cases where larger-than-expected redemption requests lead to fall below the abovementioned ratios, managers of Standard MMFs should take action to remedy the breach in a timely manner, and in doing so, should take due account of the interests of their unit-holders. Investment in units or shares of other Short-term or Standard MMFs may be included in the ratio of weekly maturing assets up to a maximum of 5% of the assets of the MMF.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 22 – paragraph 2

~~2. A standard MMF may invest up to 10% of its assets in money market instruments issued by a single body.~~deleted

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 22 – paragraph 3

3. Notwithstanding the individual limit laid down in paragraph 2, a standard MMF may combine, where this would lead to investment of up to 15% of its assets in a single body, any of the following: (a) investments in money market instruments issued by that body; (b) deposits made with that body; (c) OTC financial derivative instruments giving counterparty risk exposure to that body.deleted

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 22 – paragraph 3 a (new)

3 a. Notwithstanding the provisions of Article 10(1)(c), a Standard MMF may invest in securitisations (i) with a legal maturity at issuance or a residual maturity of 2 years or less and (ii) the underlying pool of exposures of which has an aggregate weighted average life (WAL) of 2 years or less.

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 22 – paragraph 4

~~4. All portfolio assets that a standard MMF invests in according to paragraphs 2 and 3 shall be disclosed to MMF investors.~~deleted

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 22 – paragraph 5

~~5. A standard MMF shall not take the form of a CNAV MMF.~~deleted

2015/01/12
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 24 – paragraph 1 – point d a (new)

(da) the cyclical evolution of the number of shares in the fund.

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 24 – paragraph 2 – introductory part

2. ~~The manager of the MMF shall ensure that:~~If the value of the units or shares held by a single investor exceeds 10% of the value of the fund, the manager of the MMF shall apply additional, more stringent, measures such as stress tests to ensure that a redemption by such an investor does not materially impact the liquidity profile of the MMF.

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 24 – paragraph 2 – point a

~~(a) the value of the units or shares held by a single investor does not exceed at any time the value of daily maturing assets;~~deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 24 – paragraph 2 – point b

~~(b) redemption by an investor does not materially impact the liquidity profile of the MMF.~~deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

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.deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 25 – paragraph 2 a (new)

2a. Where the stress test reveals any vulnerability of the MMF, the manager of the MMF shall take action to strengthen the robustness of the MMF, including actions that reinforce the liquidity or the quality of the assets of the MMF.

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Chapter 4 – title

Valuation rules & Accounting Treatment

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

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 MMF may also be valued by using the amortised cost method.deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 26 – paragraph 5 a (new)

5a. A MMF shall not use the amortised cost method when valuing its assets.

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 27 – paragraph 1 – subparagraph 2

The NAV per unit or share shall be calculated for each MMF~~, irrespective of whether it is a CNAV MMF or not~~.

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 27 – paragraph 4

4. The ‘constant NAV per unit or share’ shall be calculated as the difference between the sum of all assets of a CNAV MMF and the sum of all liabilities of a CNAV MMF valued in accordance with the amortised cost method, divided by the number of outstanding units or shares of the CNAV MMF.deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 27 – paragraph 5

~~5. The constant NAV per unit or share of a CNAV MMF may be rounded to the nearest percentage point or its equivalent when the NAV is published in a currency unit.~~deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 27 – paragraph 6

~~6. The difference between the constant NAV per unit or share and NAV per unit or share of a CNAV MMF shall be continuously monitor~~deleted.

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 28 – paragraph 2

~~2. By way of derogation from paragraph 1, the units or shares of a CNAV MMF shall be issued or redeemed at a price that is equal to the MMF's constant NAV per unit or share.~~deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 28 a (new)

Article 28a Accounting Treatment Units or shares of MMF should be considered as cash equivalents in compliance with the definition provided in IAS 7.

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Chapter 5

~~[...]~~deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 29

1. A MMF shall not use the amortised cost method 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 the NAV is published in a currency unit unless it has been explicitly authorised as a CNAV MMF. 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.Article 29 deleted Additional requirements for CNAV MMFs

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 30

~~[...]~~deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 31

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.Article 31 deleted Use of the NAV buffer

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 32

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.Article 32 deleted Escalation procedure

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 33

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.Article 33 deleted Replenishment of the NAV buffer

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
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.Article 34 deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 35 – paragraph 1

~~1. A CNAV MMF may not receive external support other than in the form and under the conditions laid down in Articles 30 to 34.~~deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 35 – paragraph 2

2. ~~MMFs other than CNAV~~ MMFs shall not be allowed to receive external support, except under the conditions laid down in Article 36.

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 35 – paragraph 2

2. ~~MMFs other than CNAV~~ MMFs shall not be allowed to receive external support, except under the conditions laid down in Article 36.

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 36 – paragraph 1 – introductory part

1. In exceptional circumstances justified by systemic implications or adverse market conditions the competent authority may allow a MMF ~~other than a CNAV MMF~~ to receive external support referred to in Article 35 that is intended for or in effect would result in guaranteeing the liquidity of the MMF or stabilising the NAV per unit or share of the MMF provided that all of the following conditions are fulfilled:

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 37 – paragraph 1 – subparagraph 2

A CNAV MMF shall indicate clearly that it is a CNAV MMF in any external or internal document, report, statement, advertisement, letter or any other written evidence issued by it or its manager, addressed to or intended for distribution to prospective investors, unit-holders, shareholders or competent authorities of the MMF or its manager.deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 38 – paragraph 2 – subparagraph 1 – point c

~~(c) the size and the evolution of the NAV buffer;~~deleted

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 38 – paragraph 2 – subparagraph 1 – point c a (new)

(ca) the results of stress tests;

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

Proposal for a regulation
Article 43 – paragraph 1

1. Within the ~~six months~~twenty-four 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.

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

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

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

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

2015/01/09
Committee: ECON

Alain LAMASSOURE, Alain CADEC

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:

2015/01/09
Committee: ECON