Money Market Funds (MMFs) are open-ended, collective investment schemes. They invest in short-term debt instruments issued by financial and non-financial corporate entities, sovereign governments and related agencies, as well as supranational bodies, among others. The MMF investment in such instruments provides an essential source of financing for these entities, one that often complements traditional bank financing through loans, especially for non-financial companies. Typically, money market instruments include commercial paper (CP), certificates of deposit (CDs), short term bonds, as well as bank deposits and repurchase agreements (repo and reverse repo).
International work is well underway to review existing standards applicable to MMFs, accompanied by work at the ESMA and European Commission levels in Europe. EFAMA refutes some of the commonly held misconceptions around MMFs, and seeks to inform future policy amendments based on facts and direct experience from European MMF managers.