Article 2 Definitions

For the purposes of this Regulation, the following definitions apply:

1. (1)

   ‘short-term assets’ means financial assets with a residual maturity not exceeding 2 years;

2. (2)

   F1‘money market instruments’ means instruments normally dealt in on the money market which—

   1. (a)

      are liquid;

   2. (b)

      have a value which can be accurately determined at any time; and

   3. (c)

      satisfy the conditions set out in Article 2a(1);

3. (3)

   F2‘transferable securities’ means instruments in the following categories which satisfy the conditions set out in Article 2a(4)—

   1. (a)

      shares in companies and other securities equivalent to shares in companies;

   2. (b)

      bonds and other forms of securitised debt; or

   3. (c)

      any other negotiable securities which carry the right to acquire securities referred to in subparagraph (a) or (b) by subscription or exchange;

4. (4)

   ‘repurchase agreement’ means any agreement in which one party transfers securities or any rights related to that title to a counterparty, subject to a commitment to repurchase them at a specified price on a future date specified or to be specified;

5. (5)

   ‘reverse repurchase agreement’ means any agreement in which one party receives securities, or any rights related to a title or security from a counterparty subject to a commitment to sell them back at a specified price on a future date specified or to be specified;

6. (6)

   ‘securities lending’ and ‘securities borrowing’ mean any transaction in which an institution or its counterparty transfers securities subject to a commitment that the borrower will return equivalent securities at some future date or when requested to do so by the transferor, that transaction being known as ‘securities lending’ for the institution transferring the securities and being known as ‘securities borrowing’ for the institution to which they are transferred;

7. (7)

   ‘securitisation’ means securitisation as defined in F3regulation 3(1) of the Securitisation Regulations 2024;

8. (8)

   ‘mark-to-market’ means the valuation of positions at readily available close out prices that are sourced independently, including exchange prices, screen prices, or quotes from several independent reputable brokers;

9. (9)

   ‘mark-to-model’ means any valuation which is benchmarked, extrapolated or otherwise calculated from one or more market input;

10. (10)

    ‘amortised cost method’ means a valuation method which takes the acquisition cost of an asset and adjusts that value for amortisation of premiums or discounts until maturity;

11. (11)

    ‘public debt constant net asset value MMF’ or ‘public debt CNAV MMF’ means an MMF:

    1. (a)

       that seeks to maintain an unchanging net asset value (NAV) per unit or share;

    2. (b)

       where the income in the fund is accrued daily and can either be paid out to the investor or used to purchase more units or shares in the fund;

    3. (c)

       where assets are generally valued according to the amortised cost method and where the NAV is rounded to the nearest percentage point or its equivalent in currency terms; and

    4. (d)

       that invests at least 99,5 % of its assets in instruments referred to in Article 17(7), reverse repurchase agreements secured with government debt referred to in Article 17(7) and in cash;

12. (12)

    ‘low volatility net asset value MMF’ or ‘LVNAV MMF’ means an MMF that complies with the specific requirements laid down in Articles 29, 30 and 32 and in Article 33(2)(b);

13. (13)

    ‘variable net asset value MMF’ or ‘VNAV MMF’ means an MMF that complies with the specific requirements laid down in Articles 29 and 30 and in Article 33(1);

14. (14)

    ‘short-term MMF’ means an MMF that invests in eligible money market instruments referred to in Article 10(1) and is subject to the portfolio rules set out in Article 24;

15. (15)

    ‘standard MMF’ means an MMF that invests in eligible money market instruments referred to in Article 10(1) and (2) and is subject to the portfolio rules set out in Article 25;

16. (16)

    ‘credit institution’ means credit institution as defined in point (1) of Article 4(1) of Regulation (EU) No 575/2013;

17. (17)

    ‘competent authority of the MMF’ means:

    1. (a)

       for F4EEA UCITS, the competent authority of the EEA UCITS home Member State designated in accordance with Article 97 of Directive 2009/65/EC;

    2. (b)

       for F5EEA AIFs, the competent authority of the home Member State of the AIF as defined in Article 4(1)(p) of Directive 2011/61/EU;

    3. (c)

       for F6non-EEA AIFs, any of the following:

       1. (i)

          the competent authority of the Member State where the non-EEA AIF is marketed in the Union without a passport;

       2. (ii)

          the competent authority of the EU AIFM managing the non-EEA AIF, where the non-EU AIF is marketed in the Union with a passport or is not marketed in the Union;

       3. (iii)

          the competent authority of the Member State of reference if the non-EEA AIF is not managed by an EU AIFM and is marketed in the Union with a passport;

18. (18)

    ‘legal maturity’ means the date when the principal of a security is to be repaid in full and which is not subject to any optionality;

19. (19)

    ‘weighted average maturity’ or ‘WAM’ means the average length of time to legal maturity or, if shorter, to the next interest rate reset to a money market rate, of all of the underlying assets in the MMF reflecting the relative holdings in each asset;

20. (20)

    ‘weighted average life’ or ‘WAL’ means the average length of time to legal maturity of all of the underlying assets in the MMF reflecting the relative holdings in each asset;

21. (21)

    ‘residual maturity’ means the length of time remaining until the legal maturity of a security;

22. (22)

    ‘short sale’ means any sale by an MMF of an instrument which the MMF does not own at the time of entering into the agreement to sell, including such sale where, at the time of entering into the agreement to sell, the MMF has borrowed or agreed to borrow the instrument for delivery at settlement, not including:

    1. (a)

       a sale by either party under a repurchase agreement where one party has agreed to sell to the other a security at a specified price with a commitment from the other party to sell the security back at a later date at another specified price; or

    2. (b)

       an entry into a futures contract or other derivative contract where it is agreed to sell securities at a specified price at a future date;

23. (23)

    F7‘manager of an MMF’ means—

    1. (a)

       in the case of an MMF that is a UK UCITS—

       1. (i)

          if the UCITS is an investment company that has not designated a management company, the investment company; or

       2. (ii)

          in all other cases, the management company (as defined in section 237(2) of FSMA, as amended from time to time) for that UCITS;

    2. (b)

       in the case of an MMF that is an EEA UCITS treated as a recognised scheme under regulation 62 of the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019—

       1. (i)

          if the EEA UCITS has not designated an operator (as defined in section 237(2) of FSMA), the UCITS;

       2. (ii)

          in all other cases, the operator of the EEA UCITS;

    3. (c)

       in the case of an MMF that is an AIF, an AIFM or an internally managed AIF;

24. (24)

    F8‘AIF’ has the meaning given in regulation 3 of the AIFM Regulations, as amended from time to time;

25. (25)

    ‘AIFM’, in relation to an AIF, has the meaning given in regulation 4(1) of the AIFM Regulations, as amended from time to time;

26. (26)

    ‘UK AIF’ and ‘EEA AIF’ have the meanings given in regulation 2(1) of the AIFM Regulations, as amended from time to time;

27. (27)

    ‘UCITS’ has the meaning given in section 236A of FSMA, as amended from time to time;

28. (28)

    ‘UK UCITS’ has the meaning given in section 237(3) of FSMA, as amended from time to time;

29. (29)

    ‘EEA UCITS’ means a UCITS which is authorised pursuant to Article 5 of Directive 2009/65/EC in an EEA State;

30. (30)

    ‘EU MMF’ means an AIF or UCITS which was authorised as an MMF under the EU MMF Regulation (as it had effect immediately before IP completion day) by the competent authority of a Member State other than the United Kingdom, and that authorisation has not been withdrawn or cancelled;

31. (31)

    ‘temporary marketing permission’ means—

    1. (a)

       for an EEA AIF, permission to market in the United Kingdom under regulation 78A(1) of the AIFM Regulations;

    2. (b)

       for an EEA UCITS, permission to market in the United Kingdom by virtue of Part 6 of the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 (temporary authorisation in connection with temporary recognition);

32. (32)

    ‘Regulation (EU) 600/2014’ means Regulation (EU) 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012;

33. (33)

    ‘EU MMF Regulation’ means Regulation (EU) 2017/1131 of the European Parliament and of the Council of 14 June 2017 on money market funds as it has effect in EU law;

34. (34)

    ‘Directive 2011/61/EU’ means Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010;

35. (35)

    ‘Directive 2009/65/EC’ means Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (“UCITS”);

36. (36)

    ‘FSMA’ means the Financial Services and Markets Act 2000;

37. (37)

    ‘AIFM Regulations’ means the Alternative Investment Fund Managers Regulations 2013;

38. (38)

    ‘OEIC Regulations’ means the Open-Ended Investment Companies Regulations 2001;

39. (39)

    ‘FCA’ means the Financial Conduct Authority;

40. (40)

    ‘PRA’ means the Prudential Regulation Authority.

Any reference in this Regulation to a sourcebook is a reference to a sourcebook in the Handbook of Rules and Guidance published by the FCA under the FSMA as in force on IP completion day.

F9Any reference to the PRA Rulebook is to the rulebook published by the PRA containing rules made by that Authority under FSMA as that rulebook has effect on 1 January 2022.