Summary of CySEC's Circular C378

Memo #26-2020

   CySEC Circular No: C378
   Date: 09/04/2020

Subject: ESMA Guidelines on stress test scenarios under the MMF Regulation
Purpose: To inform AIFMs and UCITS Management Companies that ESMA issued its Guidelines on stress test scenarios under the MMF Regulation.

In Summary:

CySEC has issued the Circular C378 on 08/04/2020 in order to inform Alternative Investment Fund Managers (AIFMs) and UCITS Management Companies that the European Securities and Markets Authority (ESMA) issued on March 20, 2020 the official translations in all EU official languages of its Guidelines on stress test scenarios under the MMF Regulation (the Guidelines) with reference number ESMA34-49-172.

The term Alternative Investment Fund Managers (AIFMs) includes a) Cyprus based AIFMs and internally managed AIFs whose total asset under management (AuM) exceed the thresholds of Articles 4(2)(a) or 4(2)(b) of the Alternative Investment Fund Managers Law (AIFM Law) as the case may be, and b) Cyprus based AIFMs and internally managed AIFs whose Total AuM do not exceed the thresholds of Articles 4(2)(a) or 4(2)(b) of the AIFM Law, as the case may be, but have exercised the ‘opting-in’ possibility of Article 4(6) of the AIFM Law. 

The term UCITS Management Companies includes Cyprus based Management Companies of Common Funds and/or Variable Capital Investment Companies and internally managed UCITS in accordance with the provisions of Law 78(Ι)/2012 (UCITS Law).

The Guidelines apply to: i) national competent authorities, ii) money market funds and iii) managers of money market funds as defined in the MMF Regulation.

The purpose of these Guidelines is to ensure common, uniform and consistent application of the provisions in Article 28 of the MMF Regulation.

In particular, these Guidelines establish common reference parameters of the stress test scenarios to be included in the stress tests taking into account the factors specified in Article 28(1) of the MMF Regulation.

The Guidelines apply from two months after March the 20th, 2020, hence the date of publication of the Guidelines on ESMA’s website in all EU official languages (with respect to parts in red – the other parts of the Guidelines already apply from the dates specified in Articles 44 and 47 of the MMF Regulation).

CySEC therefore urges the Regulated Entities to whom these Guidelines apply, to make every effort to comply.

The Guidelines on stress test scenarios under the MMF Regulation can be found on the following link: https://www.esma.europa.eu/sites/default/files/library/esma34-49-172_guidelines_on_mmf_stress_tests_en.pdf 

The MMF Regulation can be found on the following link: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017R1131&from=EN

Read the CySEC Circular C378

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