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Laxman Pai, Opalesque Asia:

The total asset of money market funds (MMFs) under European manager's control stood at €1.44 trillion ($1.55tn ) in 2021, the European Securities and Markets Authority (ESMA) disclosed in its inaugural market report on European Union MMFs 2023.

The securities market regulator noted that 89% of the funds are domiciled in France, Luxembourg, and Ireland. With this report, ESMA provides for the first time a comprehensive market-level view of EU MMFs, based on supervisory information collected by National Competent Authorities (NCAs) and ESMA.

According to the report, low-volatility NAV (LVNAV) MMFs account for 46% of the total assets, followed by Variable NAV (VNAV) MMFs (42%) and Constant NAV (CNAV) MMFs (12%). All MMFs domiciled in France are of the VNAV type and almost exclusively denominated in EUR.

MMFs in Luxembourg and Ireland are mainly in non-EU currencies and set up mostly as CNAVs and LVNAVs. MMFs authorized in other EU jurisdictions are VNAVs denominated in other EU domestic currencies and account only for a small fraction of assets.

Verena Ross, Chair, said: "MMFs play a central role in the financial system, by bringing together the demand for and supply of short-term funding, and are closely interconnected with other parts of the financial sector. Recent periods of stress experienced by MMFs in the short-term funding markets (such as in March 2020) have shown the importance of monitoring trends and developments in th......................

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