Service Cash Equivalents 88% Investment Services 88%
Specialism Prudential Standards 92% Governance 88%
2026-03-27 09:14:48 · adavies@vixio.com
ID
3006824
GUID
7afd1ab34f85704713bfefbe86551b8d

Classification

Service
Cash Equivalents (88%)

Money market funds are explicitly identified as cash-equivalent products in the taxonomy, and this update directly regulates MMF stress testing and liquidity management under MMFR, satisfying the Strong Yes criteria for Cash Equivalents.

Investment Services (88%)

Mandatory inheritance: Cash Equivalents as the primary tag requires Investment Services as the secondary tag, as MMFs are investment vehicles managing client assets through liquid, low-risk strategies.

Specialism
Prudential Standards (92%)

The update establishes mandatory stress testing parameters and scenarios that MMF managers must apply under Article 28 of the MMFR, which is a core prudential standard for financial soundness and risk management.

Governance (88%)

Mandatory inheritance: Prudential Standards requires the parent tag Governance to be raised as the secondary tag, reflecting the governance and risk management framework underlying these stress testing requirements.

Pipeline Progress

🔄 Pipeline Journey

Queued 09:11:39
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Metadata 09:14:04
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S3 Content 09:14:04
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Extracted 09:14:35
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LLM Gen 09:14:43
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Stored 09:14:48
TITLE: European Securities and Markets Authority Publishes Extreme Scenario Stress Testing Guidelines for Money Market Funds BODY: On 26 March 2026, the European Securities and Markets Authority (ESMA) published updated guidelines on extreme scenario stress testing for money market funds (MMFs) under the Money Market Fund Regulation (MMFR). The guidance establishes common reference parameters for stress testing scenarios that MMF managers must apply when conducting extreme scenario simulations under Article 28 of the MMFR. The guidelines apply to competent authorities, MMFs, and MMF managers across the European Union. They set out common benchmarking parameters across six risk factor categories: hypothetical changes in asset liquidity levels; credit risk changes including credit events and rating migrations; interest rate and foreign exchange movements; redemption levels; spread changes between indices linked to portfolio security interest rates; and macroeconomic shocks affecting the broader economy. The guidance specifies that MMF managers must apply liquidity cost haircuts, credit spread shocks, interest rate movements, and foreign exchange volatility parameters as defined in Section 5 of the guidelines. For liquidity scenarios, managers must model redemptions and simulate portfolio sales using a vertical slice approach, applying price impact factors. For credit risk, managers must assess credit margin increases and model default scenarios for the two largest counterparties. The guidelines include calibrated parameters for government bonds, corporate bonds, securitisations, and other eligible assets, updated for 2025 based on the latest market developments and the European Systemic Risk Board's adverse scenario. The guidelines apply two months after publication on the ESMA website in all official EU languages. Competent authorities must notify ESMA within two months of publication whether they comply with the guidelines, do not comply but intend to, or do not comply and do not intend to comply. The guidelines are updated at least annually to reflect evolving market conditions.
  • Scraped:2026-03-27 09:14:48
  • Created:2026-03-27 09:14:48
  • By:adavies@vixio.com (41)