EUROPE: ESMA Publishes Updated Compliance Table on Article 37 of the MMF Regulation

Wednesday January 13 2021

On 12^th January 2021, ESMA published an updated compliance table on the reporting to Competent Authorities under Article 37 of the MMF Regulation (ESMA34-49-173). The majority of Competent Authorities have reported that they comply or intend to comply with ESMA’s Guidelines on the reporting to Competent Authorities under Article 37 of the MMF Regulation.

However, Greece’s HCMC has announced that it does not comply and does not intend to comply with the reporting obligation related to 2019 Stress Test results based on ESMA scenarios.

The HCMC does not intend to comply with the Guidelines on MMF stress tests because, in the view of the HCMC, certain sections of the Guidelines, including certain scenarios referred to in section 5 of the Guidelines rely solely on external credit ratings while external credit ratings should only be a complement to the MMF internal credit quality assessment referred to in article 19 of the MMF R.

In addition, the HCMC would like to emphasize that for the assets referred to in article 10(3) of the MMF R (those money market instruments issued or guaranteed by the Union, or by certain public central authorities or central banks), a favourable assessment is not required pursuant to the internal credit quality assessment procedure laid down in articles 19 to 22, and therefore in that specific case, external credit ratings are not required.

The HCMC intends to comply with the remaining part of the Guidelines by 2022, when it is expected that the necessary IT tool will be applicable.

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