Documents considered by the Committee on 7 December 2016 Contents

18Financial services: Money Market Funds

Summary and Committee’s conclusions

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny

Document details

(a) Proposed Regulation on Money Market Funds; (b) European Central Bank Opinion on the proposed Regulation

Legal base

(a) Article 114 TFEU, co-decision, QMV; (b) —


HM Treasury

Document Number

(a) (35298), 13449/13 + ADDs 1–2, COM(13) 615;

(b) (36321), 12713/14, —

18.1In October 2016 we gave the Government a scrutiny waiver in relation to trilogue negotiations of a proposed Regulation on Money Market Funds (open-ended funds that invest in short-term debt securities). This was on the basis that a Council General Approach met the Government’s key objectives and that the Presidency was expected to preserve the key elements of the package of reforms that were in line with UK objectives. However, we retained the matter under scrutiny and expected the Government to inform us about any significant changes made during the trilogue process.

18.2The Government now tells us that:

18.3We are grateful to the Government for this account of the final outcome on this proposed Regulation and now clear the documents from scrutiny.

Full details of the documents

(a) Proposal for a Regulation on Money Market Funds: (35298), 13449/13 + ADDs 1–2, COM(13) 615; (b) European Central Bank Opinion of 22.05.2014 on a proposal for a Regulation on Money Market Funds: (36321) 12713/14, —.


18.4We have kept under scrutiny since October 2013 a proposed Regulation, which would introduce rules specific to Money Market Funds. These are open-ended funds that invest in short-term debt securities such as Treasury bills and commercial paper, providing short term finance to financial institutions, corporations and governments. The proposed Regulation would deal with investment policies, risk management, valuation rules, constant net asset value funds and external support.

18.5The Government had outlined to us its aim to ensure the proposed legislation addresses the financial stability concerns with these funds that arose during the financial crisis, while maintaining operational qualities of the funds that are beneficial to investors. Council consideration of the proposal had been badly delayed by polarised views between key Member States. Meanwhile the European Parliament had adopted its view of the proposal.

18.6However, in October 2016 the Government told us that:

18.7Having no further questions to ask, we were content to give a scrutiny waiver for the documents. However, we retained them under scrutiny and expected the Government to inform us about any significant changes made during the trilogue process.

The Minister’s letter of 24 November 2016

18.8The Economic Secretary to the Treasury (Simon Kirby) first reminds us that:

18.9The Minister reminds us further that:

18.10The Minister then reports that:

18.11The Minister explains these two developments from the trilogue discussions as follows:

The sunset clause on the LVNAV fund structure

The requirement for 80% of a public debt CNAV to be invested in EU debt by 2020

18.12The Minister concludes that:

Previous Committee Reports

Thirteenth Report HC 71-xi (2016–17), chapter 7 (12 October 2016); Fourth Report, HC 342-iv (2015–16), chapter 7 (16 September 2015); First Report HC 342-i (2015–16), chapter 31 (21 July 2015); Thirty-seventh Report HC 219-xxxvi (2014–15), chapter 1 (18 March 2015); Thirty-second Report, HC 219-xxxi (2014–15), chapter 11 (4 February 2015); Fifteenth Report HC 219-xv (2014–15), chapter 9 (22 October 2014) and Nineteenth Report HC 83-xviii (2013–14), chapter 12 (23 October 2013).

9 December 2016