On 20 July 2018, the European Securities and Markets Authority published a letter from its Chair, regarding the implementation of the Money Market Funds (MMF) Regulation, and the compatibility of the reverse distribution mechanism, often referred to as ‘share cancellation’.

In the letter, ESMA calls upon the European Commission to make clear to the public, the opinion of the  Legal Service of the Commission on the compatibility of the reverse distribution mechanism with the MMF Regulation, to ensure clarity to market actors and investors on the issue. Given that the MMF Regulation came into force on 21 July 2018, ESMA has requested the opinion is issued swiftly.