BlackRock has launched a fund range to comply with new European regulations for money market funds.
The product range has been created by BlackRock Global Cash Management ahead of the final implementation date of new rules in January 2019.
The final regulatory text of the EU Money Market Regulation preserves constant net asset value (CNAV) for public debt money market funds, while introducing a new type of low volatility fund.
The low volatility net asset value, or LVNAV, fund is intended to replicate the utility of CNAV money market funds with greater sensitivity to market pricing, and additional safeguards and controls built into the fund structure.
BlackRock will migrate the current range of CNAV Prime Institutional Liquidity money market funds to the new LVNAV structure starting in the fourth quarter of 2018, and will also introduce a new series of funds as a result of the regulation.
Peter Loehnert, head of BlackRock’s international cash management business, said: “We believe an early transition to the new regulation will allow for a more seamless conversion and reduced risk of complications at year-end, when liquidity pressures may increase.”
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