Central Bank of Ireland finalises guidance on MMF weekly liquid asset levels

What has the Central Bank of Ireland published?

On 30 October 2026, the Central Bank of Ireland (Central Bank) published its finalised guidance titled “Guidance on Money Market Fund Weekly Liquid Asset levels” (Guidance). This follows a consultation run by it earlier this year on the topic[1].

The Guidance sets out the Central Bank’s expectations for managers of money market funds (MMFs) to incorporate specified weekly liquid asset (WLA) market resilience levels into their liquidity risk management frameworks. It also outlines the increased supervisory scrutiny and engagement which may be initiated by it when the liquidity of an MMF falls below those levels.

Managers of MMFs have until 30 January 2027 to align their liquidity management frameworks with the requirements of the Guidance.

The objective of these measures is to enhance the overall resilience of MMFs to liquidity stress and to mitigate against the potential transmission of shocks to the wider financial system and the real economy.

What are the market resilience levels set down by the Central Bank in its Guidance?

The market resilience levels set down by the Central Bank in the Guidance are consistent with those identified by the European Commission in its May 2026 report on the adequacy of the MMFR[2] and related FAQ on the interpretation and implementation of certain legal provisions of the MMFR (Commission Report and FAQ)[3].

They also align with the approach adopted by the Luxembourg CCSF in its guidance published on the same date as the Guidance.

These are detailed in the table below.

Similar to the approach adopted by the European Commission, the Central Bank has not imposed any daily liquid assets market resilience levels.

In response to a query raised during the consultation process, the Central Bank confirms in its feedback statement on CP 168 (Feedback Statement) that given that short-term VNAV MMF operate with liquidity management frameworks similar to LVNAVs, the managers of such MMF may choose to apply higher WLA than the minimum level of 20% WLA imposed under the Guidance.

What action does the Central Bank expect MMF managers to take to ensure continued resilience of their MMFs?

The Guidance provides that:

• Liquidity stress testing procedures implemented by MMF managers should account for the WLA market resilience levels outlined above when assessing the resilience of the MMF in stressed market conditions;

• Liquidity risk management frameworks should incorporate mechanisms to alert the manager where MMFs approach internal minimum liquidity levels;

• Managers should exercise enhanced vigilance where WLA levels approach or fall below those market resilience levels on anybusiness day. This should include timely escalation to senior management and reinforced internal decision-making processes;

• If the WLA held by an MMF falls below applicable WLA resilience levels for a period exceeding 10 business days or where the MMF manager expects a prolonged and/or substantial deviation, they must notify the Central Bank, providing relevant explanations and justifications.

More broadly, the Central Bank expects the liquidity risk-management processes to integrate the findings set down in the Commission Report as well the Commission’s 2023 MMF Report.

Does the Central Bank outline what action it will take if the WLA of an MMF falls below applicable resilience levels?

Yes. The Central Bank will initiate increased supervisory scrutiny and engagement with the relevant MMF managers where:

• an MMF manager notifies it of an MMF falling below the market resilience level; or

• where reporting from MMFs and its supervisory work identifies MMFs operating below those levels for prolonged periods.

The intensity of engagement will depend on the duration and frequency of deviations and the explanations and justifications provided by the MMF manager.

In what other circumstances can the Central Bank engage with MMF managers?

The Guidance confirms that the Central Bank will undertake enhanced supervisory engagement with MMF managers at the onset of stressed market conditions affecting MMFs.

In such circumstances, it may request more frequent data, including daily reporting and key data points such as NAV, net subscriptions, weighted average maturity (WAM), weighted average life (WAL), daily and weekly liquidity buffers and, where applicable, the difference in basis points between the constant NAV and the shadow NAV.

The Central Bank may also separately periodically engage with MMF managers to gather further data from them, including for example the impact of any central bank decisions on the MMF, trading volumes observed and current portfolio holdings, cash, deposits and repos.

Does the Central Bank address the de-linking of automatic activation of LMTs fromthe liquidity buffers?

Not in the Guidance itself. However, in its Feedback Statement, the Central Bank notes that the FAQ published by the Commission delinks the automatic activation of liquidity management tools such as redemption gates and redemption fees from any breach of the regulatory liquidity thresholds set down in the MMFR.

Will MMF prospectuses require updating to address the Guidance?

No. The Guidance does not require MMF prospectuses to be updated to disclose the WLA market resilience levels. Individual MMF managers may however choose to include this information as part of the next prospectus update.

Next steps

MMF managers should assess their existing liquidity risk management frameworks against the finalised Guidance and address any gaps in their stress testing, monitoring, escalation and notification procedures to ensure compliance with the Guidance by 30 January 2027.

Footnotes:
[1] For a detailed overview of that consultation, please access our recent briefing on the topic.
[2] Regulation (EU) 2017/1131
[3] For a detailed overview of the Commission Report and FAQ, please access our recent briefing on the topic.