Fund industry associations united behind a European definition of money market funds 
Brussels, 9 July 2009Today, the European Fund and Asset Management Association (EFAMA) and the Institutional Money Market Funds Association (IMMFA) published a report on European classification and definition of money market funds.  The report defines clear-cut rules to clarify what the “money market fund” label should include.  The classification rests on a revised, more robust single category of money market funds composed of two types – short-term and regular – defined in a way that limit the main risks to which money market funds are exposed, i.e. interest rate risk, credit/credit spread risk and liquidity risk. 
The Board of Directors of EFAMA and the members of IMMFA have unanimously endorsed the proposal, and both associations are committed to seek the support of fund managers, regulatory authorities and performance measurement agencies in ensuring that the definition is used across Europe.
EFAMA and IMMFA also agree that all existing money market funds falling outside the definition of short-term and regular money market funds should be allowed to keep the money market fund label for a transitional period of 3 years.  During this time, these funds should be grouped in national fund classification systems in a separate category, under the name “other” money market funds.  By 30 June 2012, any funds that continue to fall outside the proposed definition will no longer be classified as money market funds.     
Jean-Baptiste de Franssu, President of EFAMA, adds: “The financial crisis has generated investor nervousness about the risks taken by some money market funds.  By proposing to reserve the money market fund label to funds designed to generate money market like returns, while aiming at preserving capital and maintaining strong liquidity, our objective is to enhance investor information about the exact nature of money market funds, thereby enhancing investor protection and securing the long-term attractiveness of money market funds.”   
Travis Barker, Chairman of IMMFA, adds:Given the increased attention on and concerns about money market funds, the need for a pan-European definition is more necessary than ever.  It is crucial that investors understand the nature of their investment.  The new definitions will help to clear up any investor confusion or uncertainty.”
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Notes to editors
  1. The new Money Market fund definition presented by EFAMA and IMMFA rests on a set of strict limitations on the investment strategy that money market funds should comply with to be allowed to be labelled “money market fund”.  These restrictions are summarized in the table shown in Annex.
  1. EFAMA is the representative association for the European investment management industry.  EFAMA represents through its 26 member associations and 44 corporate members about EUR 11 trillion in assets under management of which EUR 6.1 trillion managed by around 54,000 investment funds at end 2008.  For more information, please visit
  1. IMMFA, the Institutional Money Market Funds Association, represents providers of EU-based “constant net asset value” money market funds, with assets of EUR 407 billion at end 2008.  For more information, please visit
EFAMA Contact:
Peter De Proft                                                
Director General                                            
+32-2-513 39 69                                                                              
IMMFA Contact
Noreen Shah,
Press Officer              
+44 (0) 20 7831 0898