Reverse distribution mechanism

Money market funds - regulation.

(RDM).

RDM is a practice used by stable-priced money market funds to deal with negative yield, where units of shares are cancelled.

The European Commission has sent a letter to ESMA stating that it considers that RDM is not compatible with the MMF Regulation.

The Commission is requesting ESMA to develop guidance on the issue in order to ensure supervisory convergence.

See also

• ESMA
• European Commission
• Money market