pc
nid 93037
Jun 08, 2026
csoo@vixio.com
United Kingdom
Financial Conduct Authority
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1937 charsFinancial Conduct Authority Publishes Updated Proposals for United Kingdom Money Market Fund Regulation Reforms
On June 8, 2026, the Financial Conduct Authority (FCA) published updated proposals for reforming the United Kingdom Money Market Funds Regulation (MMFR), following the Government's announcement on May 15, 2026, that it will lay legislation to replace the current rules.
The FCA's updated proposals reflect further analysis conducted jointly with the Bank of England, including data from the Bank's system-wide exploratory scenario exercise. The exercise explored how the UK financial system would respond to market shocks and indicated that outflows from Money Market Funds (MMFs) may be somewhat lower than in previous stress episodes, reflecting changes in market structure and improved liquidity management capabilities. The FCA originally consulted on proposals in CP23/28 to strengthen MMF resilience, including significant increases to minimum liquid asset requirements and delinking stable net asset value (NAV) MMFs from liquidity fee and redemption gate requirements. While respondents broadly supported most proposals, a significant majority raised concerns about the proposed liquidity level increases.
The FCA's updated approach retains current minimum weekly liquid assets (WLA) requirements in rules but sets out supervisory expectations in guidance that stable NAV MMFs hold 40 percent WLA and variable NAV MMFs hold 20 percent WLA to meet resilience requirements. The FCA will retain current daily liquid assets (DLA) requirements and does not plan new DLA guidance. The FCA intends to introduce delinking and enhanced Know Your Customer requirements on investor concentration and correlated withdrawal risk.
The Government expects to introduce legislation repealing the MMFR by the end of 2026. The FCA plans to issue new MMF rules to this timescale and publish interim final guidance on WLA levels before then. A full policy statement will provide detailed analysis of the updated proposals and underlying modelling.
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2029 charsUK's Financial Conduct Authority Publishes Updated Proposals for Money Market Fund Regulation Reforms
On June 8, 2026, the Financial Conduct Authority (FCA) published updated proposals for reforming the United Kingdom Money Market Funds Regulation (MMFR), following the Government's announcement on May 15, 2026, that it will lay legislation to replace the current rules.
In December 2023, the FCA consulted on proposals to strengthen the resilience of UK‑domiciled MMFs in CP23/28, ' Updating the regime for Money Market Funds ’, key proposals included:
A significant increase in the minimum liquid asset requirement for all MMFs, raising daily liquid assets (DLA) and weekly liquid assets (WLA) levels to 15% and 50% of their assets respectively.
The removal of the regulatory link between liquidity levels in MMFs that have the ability to offer subscriptions and redemptions at a constant net asset value (NAV) (so-called ‘stable NAV MMFs’) and the need for the manager to consider or impose tools such as liquidity fees or redemption gates, known as ‘delinking’.
The FCA has now updated its plans based on consultation feedback, to:
Introduce, through a new rule, a requirement that all MMFs hold sufficient liquidity for adequate resilience.
Intention to retain in rules the current minimum WLA requirements as set out in UK MMFR.
Intention to set out in guidance strong supervisory expectation that stable NAV MMFs will need to hold 40% WLA and variable NAV MMFs will need to hold 20% WLA in order to meet the new resilience requirement.
Plans to retain the current minimum DLA requirements and do not plan new guidance on DLA levels.
Intention to introduce in large part the other measures set out in the CP, including delinking and enhanced Know Your Customer requirements on investor concentration and the risk of correlated withdrawal.
These updated proposals remain subject to final consideration and sign-off within the FCA.The Government has set out its expectation that legislation for the repeal of the MMFR will be introduced by the end of 2026. The FCA plans to make the new MMF rules to this timescale.