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3.9.2011 Official
Journal
of
the
European
Union L
228/13
REGULATION OF THE EUROPEAN CENTRAL BANK (EU) No 883/2011
of 25 August 2011
amending Regulation (EC) No 25/2009 concerning the balance sheet of the monetary financial
institutions sector (ECB/2008/32)
(ECB/2011/12)
THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,
mendation for European national legislators for super
visory purposes. In light of this, it is appropriate
Having regard to Article 5 of the Statute of the European
to introduce into Regulation (EC) No 25/2009
System of Central Banks and of the European Central Bank,
(ECB/2008/32) corresponding new identification criteria
for MMFs for European System of Central Banks stat
Having regard to Council Regulation (EC) No 2533/98 of
istical purposes so that the population of MMFs is
23 November 1998 concerning the collection of statistical
aligned with the identification criteria expected to apply
information by the European Central Bank (
for supervisory purposes following the abovementioned

1 ), and in particular
to Articles 5(1) and 6(4),
CESR Guidelines. At the same time, this change aims to
increase market transparency and facilitate management
reporting on funds,
Having regard to the opinion of the European Commission ( 2 ),
Whereas:
HAS ADOPTED THIS REGULATION:
(1) Directive
2009/110/EC
of
the
European
Parliament
and
Article 1
of the Council of 16 September 2009 on the taking up,
pursuit and prudential supervision of the business of
Regulation (EC) No 25/2009 (ECB/2008/32) is amended as
electronic money institutions amending Directives
follows:
2005/60/EC and 2006/48/EC and repealing Directive
2000/46/EC ( 3 ) allowed legal persons to issue electronic
(1) Article 1 is amended as follows:
money without needing to obtain the status of credit
institutions.
(a) the first indent is replaced by the following:
(2) As
a
consequence
and
in
order
to
continue
the
collection
of statistics in the monetary financial institutions (MFI)
‘— “monetary financial institution” (MFI) means a
sector on electronic money institutions that are
resident undertaking that belongs to any of the
principally engaged in financial intermediation in the
following sectors:
form of issuing electronic money, it is necessary to
adjust the definition of MFIs, and therefore also to
update the definitions of ‘electronic money institution’
(i) central banks;
and ‘electronic money’ in this Regulation. Electronic
money institutions within the MFI sector should be clas
(ii) credit institutions as defined in Article 4(1) of
sified under the category of ‘other MFIs’.
Directive 2006/48/EC;
(3) The
amendments
to
the
definition
of
and
the
requirements placed on electronic money institutions
(iii) other MFIs, i.e. (1) other financial institutions
pursuant to Directive 2009/110/EC have made the
whose business is (i) to receive deposits and/or
provisions of Regulation (EC) No 25/2009 of the
close substitutes for deposits from entities
European Central Bank (ECB/2008/32)
(
other than MFIs; and (ii) for their own

4 ) on the
granting of derogations from reporting requirements to
account, at least in economic terms, to grant
electronic money institutions obsolete and therefore the
credits and/or make investments in securities;
respective provisions of Regulation (EC) No 25/2009
or (2) such electronic money institutions that
(ECB/2008/32) should be deleted.
are principally engaged in financial inter
mediation in the form of issuing electronic
money;
(4) The
guidelines
on
a
common
definition
of
European
money market funds (MMFs) issued on 19 May 2010
by the Committee of European Securities Regulators
(iv) money market funds (MMFs) as defined in
(CESR), the predecessor of the European Securities and
Article 1a.
Markets Authority, aim to improve investor protection
by setting out criteria to be applied by any fund that
wishes to market itself as an MMF and serve as a recom
Concerning the criterion under point (iii)(1)(i)
above, the degree of substitutability between the
instruments issued by other MFIs and the deposits
( 1 ) OJ L 318, 27.11.1998, p. 8.
placed with credit institutions shall determine their
( 2 ) C(2011) 5090 final.
( 3 ) OJ L 267, 10.10.2009, p. 7.
classification as MFIs, provided they fulfil the
( 4 ) OJ L 15, 20.1.2009, p. 14
criterion under point (iii)(1)(ii),’;

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L 228/14
EN
Official Journal of the European Union
3.9.2011
(b) the eighth indent is replaced by the following:
equal to 2 years, provided that the time remaining until
the next interest rate reset date is less than or equal to
‘— “electronic money institution” and “electronic
397 days whereby floating rate securities should reset to
money” mean electronic money institution and
a money market rate or index;
electronic money as defined in Article 2(1) and
2(2) of Directive 2009/110/EC of the European
(g) limit investment in other collective investment under
Parliament and of the Council, (*).
takings to those complying with the definition of MMFs;
___________
(*) OJ L 267, 10.10.2009, p. 7.’;
(h) do not take direct or indirect exposure to equity or
commodities, including via derivatives and only use
derivatives in line with the money market investment
(2) the following Article 1a is inserted:
strategy of the fund. Derivatives which give exposure to
foreign exchange may only be used for hedging
purposes. Investment in non-base currency securities is
‘Article 1a
allowed provided the currency exposure is fully hedged;
Identification of MMFs
For the purpose of this legal act, collective investment
(i) have either a constant or fluctuating NAV.
undertakings complying with all the following criteria
___________
shall be treated as MMFs, where they:
(*) OJ L 302, 17.11.2009, p. 32.’;
(a) pursue the investment objective of maintaining a fund’s
principal and providing a return in line with the interest
rates of money market instruments;
(3) in Article 8, paragraph 4 is deleted;
(b) invest in money market instruments which comply with
(4) without prejudice to Article 2 of this Regulation, in Part 1
the criteria for money market instruments set out in
of Annex I, Section 2 is replaced by the following:
Directive 2009/65/EC of the European Parliament and
of the Council of 13 July 2009 on the coordination of
‘Section 2: Specifications for the MMFs’ identification
laws, regulations and administrative provisions relating
criteria
to undertakings for collective investment in transferable
securities (UCITS) (*), or deposits with credit institutions
For the purpose of Article 1a of this Regulation:
or, alternatively, ensure that the liquidity and valuation
of the portfolio in which they invest is assessed on an
(a) the money market instrument shall be considered to be
equivalent basis;
of a high credit quality, if it has been awarded one of
the two highest available short-term credit ratings by
(c) ensure that the money market instruments they invest
each recognised credit rating agency that has rated the
in are of high quality, as determined by the
instrument or, if the instrument is not rated, it is of an
management company. The quality of a money
equivalent quality as determined by the management
market instrument shall be considered, inter alia, on
company’s internal rating process. Where a recognised
the basis of the following factors:
credit rating agency divides its highest short-term rating
into two categories, these two ratings shall be
— the credit quality of the money market instrument,
considered as a single category and therefore the
highest rating available;
— the nature of the asset class represented by the
money market instrument,
(b) the money market fund may, as an exception to the
requirement in paragraph (a), hold sovereign issuance
— for structured financial instruments, the operational
of at least investment grade quality, whereby ‘sovereign
and counterparty risk inherent within the structured
issuance’ means money market instruments issued or
financial transaction,
guaranteed by a central, regional or local authority or
central bank of a Member State, the ECB, the European
— the liquidity profile;
Union or the European Investment Bank;
(d) ensure that their portfolio has a weighted average
(c) when calculating WAL for securities, including
maturity (WAM) of no more than 6 months and a
structured financial instruments, the maturity calculation
weighted average life (WAL) of no more than 12
is based on the residual maturity until the legal
months;
redemption of the instruments. However, when a
financial instrument embeds a put option, the exercise
(e) provide daily net asset value (NAV) and a price calcu
date of the put option may be used instead of the legal
lation of their shares/units, and daily subscription and
residual maturity only if the following conditions are
redemption of shares/units;
fulfilled at all times:
(f) limit investment in securities to those with a residual
— the put option may be freely exercised by the
maturity until the legal redemption date of less than or
management company at its exercise date,

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EN
3.9.2011 Official
Journal
of
the
European
Union L
228/15
— the strike price of the put option remains close to
(g) ‘money market instruments’ means instruments
the expected value of the instrument at the next
normally traded on the money market which are
exercise date,
liquid and have a value which can be accurately
determined at any time;
— the investment strategy of the MMF implies that
there is a high probability that the option will be
(h) ‘management company’ means a company, the regular
exercised at the next exercise date;
business of which is the management of the portfolio of
an MMF.’.
(d) when calculating both WAL and WAM, the impact of
financial derivative instruments, deposits and efficient
Article 2
portfolio management techniques shall be taken into
account;
Transitional provision
National central banks (NCBs) may continue to collect statistical
(e) ‘weighted average maturity’ (WAM) shall mean a
information under Regulation (EC) No 25/2009 (ECB/2008/32)
measure of the average length of time to maturity of
from the MMFs resident in their Member States identified in
all of the underlying securities in the fund weighted to
accordance with the former Section 2 of Part 1 of Annex I to
reflect the relative holdings in each instrument,
Regulation (EC) No 25/2009 (ECB/2008/32) until 31 January
assuming that the maturity of a floating rate instrument
2012 at the latest. They shall notify all MMFs concerned of their
is the time remaining until the next interest rate reset to
decision to apply this transitional provision. NCBs shall start
the money market rate, rather than the time remaining
collecting statistical information from MMFs identified in
before the principal value of the security must be repaid.
accordance with Article 1a of Regulation (EC) No 25/2009
In practice, WAM is used to measure the sensitivity of a
(ECB/2008/32) from 1 February 2012 at the latest.
MMF to changing money market interest rates;
Article 3
(f) ‘weighted average life’ (WAL) shall mean the weighted
average of the remaining maturity of each security held
This Regulation shall enter into force on the 20th day following
in a fund, meaning the time until the principal is repaid
its publication in the Official Journal of the European Union.
in full, disregarding interest and not discounting.
Contrary to the calculation of the WAM, the calculation
of the WAL for floating rate securities and structured
Done at Frankfurt am Main, 25 August 2011.
financial instruments does not permit the use of interest
rate reset dates and instead only uses a security’s stated
final maturity. WAL is used to measure the credit risk,
For the Governing Council of the ECB
as the longer the reimbursement of principal is
postponed, the higher the credit risk. WAL is also
The President of the ECB
used to limit the liquidity risk;
Jean-Claude TRICHET

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