On 31 October 2018, there was published a letter from the President of the European Commission (the Letter) to the Chair of the European Securities and Markets Authority (ESMA) on the implementation of the Money Market Funds (MMF) Regulation.

The letter responds to ESMA’s Letter on the same topic of 20 July 2018 (see our blog here). In the Letter, the President welcomes that the reverse distribution mechanism (the Mechanism) has been discussed at the Board of Supervisors and that competent authorities are aware of the opinion of the Legal Service of the Commission on the mechanism’s  incompatibility with the MMF Regulation has been adopted. As the MMF Regulation is already in force, the President stresses to ESMA that it is important to have a consistent European approach to such issues.