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The European Securities and Markets Authority (ESMA), the EU's securities markets regulator, today published its Final Report (FR) on highly liquid financial instruments for CCP investment policies under EMIR.
ESMA was mandated to assess whether the scope of highly liquid financial instruments with minimal market and credit risk for CCP cash reinvestments should be extended and if such a list should include some or all Money Market Funds (MMF) authorised under the MMFR.
The report concludes that it would be premature to allow CCP investments in MMFs, as no category of MMFs currently meets all the conditions that define highly liquid financial instruments. The forthcoming review of the MMF Regulation is expected to assess possible changes to the regulatory framework that might make EU MMF adequate for CCP investments.
Next steps
The Report was sent to the European Commission (EC). ESMA will consider further work to potentially amend relevant sections of the RTS or other relevant level 3 measures.