On 5 May 2026, the European Securities and Markets Authority (ESMA) issued a consultation paper proposing a new approach to updating the parameters for stress test scenarios under the Money Market Funds (MMFs) framework.
The MMF Regulation provides that ESMA shall develop guidelines with a view to establishing common reference parameters of the stress test scenarios to be included in the stress tests that MMFs or managers of MMFs are required to conduct (the Guidelines) and update them annually based on the input provided by the European Systemic Risk Board. The first iteration of the Guidelines was published in July 2019 and has resulted in the text of the Guidelines being updated every year with new parameters. ESMA is proposing to replace the annual update of the parameters included in the Guidelines (section 5 of the Guidelines that includes the calibrations) with an annual update of a dedicated page on ESMA’s website where the parameters would be made available. The new approach will also provide greater flexibility in terms of timing, as the new parameters will be immediately available on the dedicated ESMA webpage upon approval, and immediately applicable, without waiting for the translation of the Guidelines to be finalised.
Next steps
The deadline for comments on the consultation paper is 6 August 2026.
ESMA will consider the feedback received to the consultation and expects to publish the corresponding final report in H2 2026. The new procedure for the update of the parameters will apply with the next update, which is expected at the end of 2026.