France's Financial Markets Authority has opened a public consultation on a draft recommendation on money market fund liquidity. The proposal follows European and international work after the market stress seen in March 2020 and recent European Commission publications on the application of the Money Market Funds Regulation. It is intended to strengthen money market fund resilience, especially liquidity risk management, and support convergence across major European jurisdictions. The draft recommendation would incorporate into the AMF's doctrine the market resilience levels identified by the European Commission as supervisory reference points. These are set at 20% weekly liquid assets for variable net asset value money market funds, compared with the 15% regulatory minimum, and 40% for public debt constant net asset value and low volatility net asset value funds, compared with the 30% regulatory minimum. It also sets expectations where a fund's weekly liquid assets remain below those levels. Management companies would be expected to apply enhanced monitoring, rapid internal escalation and stronger decision-making processes. If a breach lasts 10 working days, or a prolonged or significant shortfall is anticipated, firms would have to notify the AMF and provide explanations and, where relevant, stress test results. The AMF would then step up supervision and engagement with the managers concerned on a proportionate, risk-based basis. The consultation runs until 3 August 2026.

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