European Union lawmakers reached a provisional agreement on regulation of the bloc’s 1 trillion-euro ($1.1 trillion) money-market fund industry after years of wrangling.
The draft legislation is aimed at increasing the liquidity of the funds and to protect them against runs in stressed market conditions, the European Parliament said in a statement on Wednesday. Funds would also have to invest in “well-diversified assets of the highest credit quality” to ensure their stability, according to the Council of the European Union, which represents EU member states.
“This agreement is an important step forward” in regulating money funds, Neena Gill, the parliament’s lead lawmaker on the bill, said in the statement. “The EU has been lagging behind on its international commitments to regulating the sector. The U.S. implemented its own reform in October this year.”