On January 28, 2020, the CSSF published the following three Circulars for the attention of all money market funds (“MMF(s)”) under the supervision of the CSSF and Luxembourg managers of MMFs as well as of those that take part in the functioning and control of these undertakings:
CSSF Circular 20/734 on new reporting obligations for MMF managers and CSSF Circular 20/736 on ESMA Guidelines on the reporting to competent authorities under Article 37 of the MMF Regulation
Article 37 of Regulation (EU) 2017/1131 of 14 June 2017 on money market funds (“MMF Regulation”) requires that periodical information from the managers of MMFs be provided to competent authorities within a frequency depending on the assets under management.
Following the publication of (i) the template to be used by managers of MMFs when reporting to competent authorities under Article 37 of the MMF Regulation (found in the Annex to Regulation (EU) 2018/708), (ii) ESMA’s “Money Market Fund reporting technical reporting instructions” - Ref. ESMA/65-8-6480, and (iii) ESMA’s “Guidelines on the reporting obligations to competent authorities under Article 37 of the MMF Regulation” – Ref. ESMA34-49-168, Circular 20/734 provides additional Luxembourg specific technical details for managers of MMFs to fulfil their reporting obligations under Article 37 of the MMF Regulation.
ESMA’s “Guidelines on the reporting obligations to competent authorities under Article 37 of the MMF Regulation” are implemented into the Luxembourg regulation by means of CSSF Circular 20/736.
The CSSF Circular 20/736 emphasises that the first reporting period starts from 01/01/2020 to 31/03/2020 for MMFs subject to a quarterly reporting obligation, respectively from 01/01/2020 to 31/12/2020 for MMFs subject to a yearly reporting obligation. For funds authorised as MMFs after 1 January 2020, the first reporting should cover the period from the authorisation date of the MMF (exact date) until the end of the reporting period. This also means that MMF managers will have to provide reports for MMFs that are authorised, but have not yet been launched.
Further to ESMA’s statement on March 31, 2020, the CSSF announced that the submission of quarterly reportings for Q1 and Q2 to the CSSF as required per Article 37 of the MMF Regulation by managers of Luxembourg domiciled MMFs is postponed to September 2020; the CSSF stated that the submission of the relevant reportings before the September deadline is nevertheless encouraged. As a result, the previously applicable submission deadline stated in Circular CSSF 20/736 (end of April 2020) is postponed. In light of the above, ESMA has published on June 4, 2020 an amended XML schema (version 1.1) and reporting instructions for MMF reporting on its website. The CSSF published afterwards the national specifications to be followed by the entities under its supervision in order to submit the MMF reporting (MMFR Handbook and Reporting Specifications). Despite implementing the amended XML schema, the CSSF will issue a separate communication once reporting entities may use the amended XML schema to provide the reporting files.
CSSF Circular 20/735 on ESMA Guidelines on stress test scenarios under Article 28 of the MMF Regulation
Article 28 of the MMF Regulation provides that ESMA shall develop guidelines with a view to establishing common reference parameters of the stress test scenarios to be included in the stress tests that MMFs or managers of MMFs are required to conduct. These guidelines will be updated at least every year taking into account the latest market developments.
The CSSF has implemented into the Luxembourg regulatory framework the first set of these guidelines (Ref. ESMA34-49-115) back in 2018 with the publication of the CSSF Circular 18/696. In light of the recent update to the guidelines, CSSF Circular 20/735 now adopts into national regulation ESMA’s updated “Guidelines on stress tests scenarios under Article 28 of the MMF Regulation” - Ref. ESMA/34-49-164. In contrast with their previous version, these latest ESMA guidelines now include common reference stress test scenarios as well as common reference parameters for those scenarios.