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European Money Market Fund Reform

New rules for Money Market Funds in Europe applied from January 2019. HSBC has been actively keeping clients informed of the details of the new rules, and the changes they mean for our funds in Europe.

Further update on HSBC Global Liquidity Funds plc implementation of EU Money Market Fund Reform


On 11 January, the Central Bank of Ireland (Central Bank) provided further clarification to fund providers on the timeline for compliance with the new EU Money Market Fund Reform regulations. As a result of this clarification, HSBC Global Asset Management Ltd and the Central Bank agreed a conversion date for the HSBC Global Liquidity Funds plc range.

All the Global Liquidity Funds plc CNAV funds converted to LVNAV funds and the USD Treasury CNAV fund to a Public Debt CNAV fund, on 5 February.

The new prospectus has been published on http://www.globalliquidity.hsbc.com.

Should you wish to remain invested in the converted funds, there is no requirement for you take any action. You will continue to be able to invest into and redeem from the funds using the same mechanism that you use today.

Additional information for HSBC Euro Liquidity Fund investors


HSBC Global Asset Management Ltd is pleased to be able to offer investors a Euro LVNAV fund from the 5 February. This new fund will continue to make use of the Reverse Distribution Mechanism (for negative yields) until the 18 March, at which point the distribution share class will be converted into an accumulating shares class (detailed information on this conversion and the accumulating share classes will be provided to HSBC Euro Liquidity Fund investors). The remaining accumulating share classes will continue to benefit from the ability to offer same day settlement. The prospectus update referenced above will contain additional information, please also see this link to a joint announcement made by the Central Bank and the Commission de Surveillance du Secteur Financier (Luxembourg), relating to the use of RDM until 21 March at the latest.

Please see the following confirmed fund line up:

Sub Fund Fund type pre-Reform Fund type from 4 February Notes
USD Liquidity CNAV LVNAV Distributing and Accumulating share classes continue to be available post conversion.
Sterling Liquidity CNAV LVNAV
Canadian Liquidity CNAV LVNAV
AUD Liquidity CNAV LVNAV
US Treasury Liquidity CNAV Public Debt CNAV
Euro Liquidity CNAV LVNAV Distributing and Accumulating share classes are available until 18 March, after which all Distributing share classes will be transitioned to Accumulating share classes (following removal of RDM).

In addition and subject to a shareholder vote on 18 February, the NAV of the share classes will need to be quoted to a greater number of significant figures and therefore it is proposed to increase the NAV per share from Euro1.00 to Euro10,000, with four decimal places.

If you have any questions or require any further information please do not hesitate to contact us.

UK Corporates

Liquidity.UK.Corporate@hsbc.com

UK Financial Institutions

Liquidity.UK.FIG@hsbc

EMEA

Liquidity.EMEA@hsbc.com

Webinar


Webinar

Watch our webinar on European Money Market Fund Reform, presented by Jonathan Curry, Global CIO Liquidity

Watch here