IMA to monitor money market funds

The Investment Management Association is to monitor the portfolio holdings of money market funds following its adoption of new rules for the sector.

It adopted the European Securities and Markets Authority’s definition of money market funds for the sector on July 1 this year. After the six month grace period, it will begin monitoring the holdings in January.

Although the FSA has said it requires the IMA’s money market sector to comply with the European regulator’s model, the IMA is still consulting with members on the new definition of the IMA Money Market Sector.

A number of money market funds incurred large losses in the midst of the financial crisis, including Threadneedle’s UK Money Securities fund, Zurich money market life and pension funds and Standard Life’s Sterling fund.

Standard Life was fined £2.4m by the FSA for failures related to its management of the fund.