European Parliament proposes positive amendments to the draft money market funds legislation

The complete set of amendments proposed by members of the European Parliament to the draft money market funds legislation has just been published.  As readers will recall, the original draft was extremely restrictive as to the types of securitisations that could be purchased by MMFs – basically short dated corporate loans.  A number of key MEPs have now tabled amendments.  Particularly notable were the extension of the types of securitisations that MMFs could purchase proposed by Jean-Paul Gauzes, Wolf Klinz and Sharon Bowles.  All three amendments request ESMA to define the types of securitisations that MMFs can invest in.  Especially important to us was the very straightforward amendment by Mr Klinz requiring ESMA to draft a definition of “high quality securitisation”; a position very consistent with his proposed draft response to the Commission’s Green Paper on Long-Term Funding (see our earlier post here).  These amendments are to be welcomed as a sign that the concept of regulation based on “high quality securitisation” together with a desire for a harmonised approach to this issue is making strong progress.  The text of the amendments may be found here.