View more on these topics

IMA welcomes new European definition for money market funds

The Investment Management Association has welcomed new definitions of money market funds published by the European Fund and Asset Management Association and the Institutional Money Market Funds Association.

The classification offers a revised, more robust single category of money market funds composed of two types – short-term and regular – defined to limit the main risks to which money market funds are exposed such as interest rate risk, credit/credit spread risk and liquidity risk.

EFAMA and IMMFA agree that all existing money market funds falling outside these definitions should be allowed to keep the money market fund label for a transitional period of three years.

During this time, these funds should be grouped in national fund classification systems in a separate category, under the name “other” money market funds.

By June 30 2012, any funds that continue to fall outside the proposed definition will no longer be classified as money market funds.

The IMA money market sector definition at present is: “Funds which invest at least 95 per cent of their assets in money market instruments, i.e. cash and near cash, such as bank deposits, certificates of deposit, very short term fixed interest securities or floating rate notes.”

The IMA is currently consulting its members about adopting the new short term money market funds definition as a replacement for the existing IMA definition.

The consultation runs until the end of August and if members agree to adopt the new definition it will be effective from January 1 2010.

Recommended

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com