On 11 February 2025, the European Systemic Risk Board (ESRB) issued a report that provides a compliance assessment of the implementation of the ESRB’s  recommendation of 2 December 2021 on reform of money market funds (MMFs). The recommendation was addressed to the European Commission (Commission) as is the report.

The ESRB’s recommendation addressed certain policy recommendations to the Commission regarding the regulation and supervision of MMFs and aimed to address vulnerabilities stemming from the MMF sector. Recommendations issued by the ESRB are not legally binding but are subject to an “act or explain” regime which means that the addressee has to communicate to the European Parliament, the Council of the EU, the Commission and the ESRB the actions they have taken to comply with the recommendations or provide adequate justification for inaction.

The report reflects the implementation status as at 31 December 2023.

The compliance assessment is therefore based on the Commission’s actions and explanations up until the end of 2023. A key source of information is the Commission’s July 2023 report to the European Parliament and the Council on the functioning of Regulation (EU) 2017/1131 on money market funds.