ESMA Updates Guidelines on Stress Test Scenarios for MMFs

What’s new?

Article 28(1) of the Money Market Funds (MMF) Regulation requires MMFs or their managers to implement stress tests.

On 13 January 2026, the European Securities and Markets Authority (ESMA) published a Final Report containing updated Guidelines that establish common reference parameters for scenarios to be included in these tests (the Guidelines).

What does the Report say?

Article 28(7) of the MMF Regulation requires ESMA to develop guidelines on common reference parameters for stress test scenarios to be used by MMFs and their managers.

The Guidelines set out changes to stress test scenarios for MMFs in relation to hypothetical changes in risk factors such as credit and interest rates, liquidity, macro-economic and redemption levels.

These Guidelines are updated annually to take into account the latest market developments and have been developed in collaboration with the European Systemic Risk Board and European Central Bank.

What has changed?

In its latest update, ESMA has revised section 5 of the Guidelines to reflect its annual calibration of risk parameters.

For all other sections, the 2024 Guidelines will continue to apply.

Section 5 contains the specific numerical parameters and calibration table that MMF managers must use when conducting and reporting the results of their stress tests.

Next steps

Once the Guidelines have been translated into the official EU languages and published on ESMA’s website, the Guidelines will apply two months after publication. From that date, MMF managers will be required to report in accordance with the updated Guidelines.