On 11 January 2019, the CSSF issued a press release (19/03) to communicate its joint statement, together with the Central Bank of Ireland (CBI) on the treatment of share cancellation under the money market fund regulation 2017/1131 ("MMFR" or "Regulation"). This statement makes it clear that the share cancellation is to be ceased and indicates the expected steps to be followed.
According to article 44 of the MMFR, existing MMFs (i.e. existing prior to 21 July 2018) must submit an application for authorisation with their competent authority by 21 January 2019 in order to demonstrate their compliance with the Regulation. This application should also include details of arrangements for the cessation of the use of the share cancellation mechanism. In accordance with article 44 of the MMFR, the competent authorities, i.e. the CSSF or the CBI should assess the compliance of each applicant fund with the MMFR no later than 21 March 2019 (two months after the application of the MMFR) and notify the funds immediately with their decision.
With effect from 21 January 2019, the CBI and the CSSF will request the relevant funds to:
- Provide a copy of this notice (joint statement) to investors and notify such investors that they are invested in a fund which is the subject of this notice;
- Ensure all necessary and appropriate facilities are available for investors or prospective investors to get such information as they may require from the fund with respect to the subject matter of this notice;
- Take such steps which in the opinion of the fund are appropriate to avoid a disorderly sale of fund assets; and
- Confirm to the CBI or the CSSF (as applicable) in writing by no later than 21 March 2019 that all use of share cancellation mechanisms has ceased.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.