On 15 June 2021, the European Commission adopted a Delegated Regulation amending Delegated Regulation 2018/990 with regard to requirements for assets received by money market funds as part of reverse repurchase agreements.

The Regulation on Money Markets Funds (MMF Regulation) lays down rules on authorisation of money market funds that cover, among other things, eligible assets and their quality. In Article 15(7), it empowers the Commission to specify supplementary quantitative and qualitative liquidity requirements applicable to assets received as part of repurchase agreements. Commission Delegated Regulation 2018/9902 requires money market fund managers to apply additional requirements where the counterparty is not regulated under EU law or not covered by an equivalence decision. Delegated Regulation 2018/990 refers to equivalence decisions in general terms, without cross-reference to specific provisions under sectoral legislation.

The Delegated Regulation that the Commission has adopted revises Delegated Regulation 2018/990 to specify the relevant provisions in the Capital Requirements Regulation, the MiFID II Directive and the Solvency II Directive on which equivalence decisions should be adopted for the exemption to be applied in relation to these entities.

The next step will be for the Council of the EU and the European Parliament to consider the Delegated Regulation.

The Delegated Regulation enters into force on the twentieth day following that of its publication in the Official Journal of the EU.

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