Money market funds are explicitly identified as cash-equivalent products in the taxonomy, and this update establishes stress-testing requirements specifically for MMF managers under EU regulation, satisfying the Strong Yes criteria for Cash Equivalents.
Mandatory inheritance: Cash Equivalents as the primary tag requires Investment Services as the secondary tag, as MMF managers are investment service providers managing liquid asset portfolios.
Specialism
The update establishes mandatory stress testing requirements and uniform reporting parameters for money market funds under EU regulation, which constitutes regulatory reporting obligations for financial institutions.
Mandatory inheritance: Regulatory Reporting is a child of Supervision, so Supervision must be raised as the secondary tag.
2026-03-27 09:14:03·adavies@vixio.com
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TITLE: European Securities and Markets Authority Publishes Guidelines on Stress Test Scenarios for Money Market Funds
BODY:
On March 26, 2026, the European Securities and Markets Authority (ESMA) published guidelines establishing common reference parameters for stress test scenarios under Article 28 of Regulation (EU) 2017/1131 on money market funds (MMF Regulation).
The guidelines apply to competent authorities, money market funds, and managers of money market funds across the European Union. They establish uniform stress testing requirements covering six key risk factors: hypothetical changes in asset liquidity levels; credit risk changes including credit events and rating events; interest rate and exchange rate movements; redemption levels; spreads among indexes to which interest rates of portfolio securities are tied; and macro-systemic shocks affecting the economy. The guidelines require managers to conduct both general stress tests under sections 4.1 to 4.7 and additional common reference stress test scenarios under section 4.8, with results reported in accordance with Article 37 of the MMF Regulation.
ESMA updated the calibration parameters in 2025 in collaboration with the European Systemic Risk Board (ESRB) and the European Central Bank (ECB) to reflect latest market developments. The guidelines provide specific discount factors for liquidity stress, credit spread shocks by asset rating and maturity, interest rate yield shocks across multiple currencies, foreign exchange shock parameters, and redemption scenario specifications. Competent authorities must notify ESMA within two months of the guidelines' publication on ESMA's website in all EU official languages whether they comply with the guidelines, including reasons for any non-compliance. The guidelines apply from two months after publication on ESMA's website in all EU official languages.