IMMFA Criticises EC Proposal on Regulatory Capital Levels

IMMFA, the trade association for the money fund industry, said the levels of regulatory capital recommended by the European Commission are ‘incorrectly calibrated’. IMMFA said it welcomed the European Commission’s consultation on revised capital requirements for credit institutions and investment firms, but raised a number of issues related to the classification of IMMFA funds as an asset type. Although the association accepted the requirement for investment management firms to hold a minimum amount of regulatory capital, it disagreed with the level proposed. IMMFA added that the Commission should write rules to allow CIUs (Collective Investment Undertakings) to be held in a bank’s non-trading book and to distinguish between types of CIUs, in particular to take into account CIUs that are rated by an ECAI, and the nature of the rating.

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