IOSCO Issues Progress Reports on Money Market Fund Regulation and Securitizations

IOSCO published two reports updating IOSCO's 2015 peer reviews concerning the (i) "Regulation of Money Market Funds ("MMF")" and the (ii) "Implementation of Incentive Alignment Recommendations for Securitisation." The reports track the progress of twenty-four Financial Stability Board jurisdictions "in adopting legislations, regulation and other policies in the G20 priority reform areas covering MMF and Securitization."

The first report, on MMF regulation, covered three major areas: (i) issues associated with valuation practices of MMFs, (ii) effectiveness of liquidity management for MMFs, and (iii) risks and issues that may affect the stability of MMFs that offer a stable Net Asset Value ("NAV"). IOSCO found that (i) MMFs in most jurisdictions have implemented a fair value approach for valuation, (ii) progress on liquidity management has been "less advanced and less even," and (iii) only nine of the jurisdictions allow MMFs that offer a stable NAV and, of those, only five have final implementation measures in force.

The second report, concerning prior incentive alignment recommendations for securitizations, covered two areas: (i) evaluating incentives across the securitization value chain, and (ii) setting out the elements of the incentive alignment approach, including risk retention. The report found "mixed" progress across the jurisdictions.