The Financial Conduct Authority has set out next steps for new UK Money Market Fund rules and guidance after the Government signalled it will replace the current UK Money Market Funds Regulation. The revised approach scales back the liquidity changes proposed in consultation. Rather than raising minimum weekly liquid asset requirements in rules to 50% for all funds, the FCA now plans to keep the current statutory minimums and introduce a new resilience rule supported by guidance that stable net asset value money market funds should hold 40% weekly liquid assets and variable net asset value funds should hold 20%. The update follows further FCA and Bank of England analysis, including evidence from the Bank’s system-wide exploratory scenario, which suggested that money market fund outflows could be lower in some stress scenarios than in past episodes. The FCA plans to retain current minimum daily liquid asset requirements without new guidance, while proceeding in large part with the other consultation proposals, including delinking liquidity thresholds from mandatory consideration or use of fees and gates for stable NAV funds, and enhanced Know Your Customer requirements focused on investor concentration and correlated withdrawals. Funds would be expected to fall below the 40% or 20% weekly liquidity levels only to meet redemptions or in circumstances outside the manager’s control, and not as a regular quarter-end or year-end practice. The Government expects repeal legislation to be introduced by the end of 2026, and the FCA plans to make its new money market fund rules to that timetable. A policy statement will set out the updated proposals and underlying modelling in more detail, and interim final guidance on weekly liquid asset levels is due before then.
Financial Conduct Authority2026-06-08
Financial Conduct Authority outlines revised Money Market Fund reforms with 40% and 20% weekly liquidity expectations
The Financial Conduct Authority has outlined its revised approach to new UK money market fund rules after the Government’s decision to replace the current UK Money Market Funds Regulation, scaling back previously proposed liquidity increases. It will retain existing statutory minimum daily and weekly liquid asset requirements, introduce a new resilience rule with guidance that stable net asset value funds should hold 40% and variable net asset value funds 20% in weekly liquid assets, and proceed with proposals to delink liquidity thresholds from fees and gates and to strengthen Know Your Customer requirements. The FCA plans to align final rules with Government repeal legislation expected by end-2026, supported by a policy statement and interim final guidance on weekly liquid asset levels.