FCA publishes an update on proposed reforms to the UK MMF Regulation

On 8 June 2026, the FCA published a new webpage, setting out an update on reforms to the UK Money Market Fund Regulation.

Updated proposals

The FCA is proposing to introduce a new rule requiring all MMFs to hold sufficient liquidity for adequate resilience.

The current minimum weekly liquid assets (WLA) requirements set out in UK MMFR will be retained.

However, FCA guidance will set out a "strong supervisory expectation" that, to meet a new resilience requirement

• stable NAV MMFs (which are able to offer subscriptions and redemptions at a constant NAV) will need to hold 40% WLA

• variable NAV MMFs will need to hold 20% WLA.

The FCA notes its expectation that an MMF should use its ability to be temporarily below the 40% / 20% WLA levels "only to meet redemptions or for reasons that are beyond the manager's control (which we consider would arise very rarely)".

The FCA, though, is not planning to alter the current minimum daily liquid assets (DLA) requirements nor to introduce new guidance on DLA levels.

What's the background to the updated proposals?

This follows a UK Government  statement, made on 14 May 2026, which signals its expectation that legislation will be brought forward by the end of the year to replace the UK Money Market Funds Regulation.  

The FCA consulted in CP23/28 on proposals to strengthen the resilience of UK‑domiciled MMFs. (Our summary of the CP can be found here.)

Among the key proposals put forward in the CP were

• significantly increasing the minimum liquid asset requirement for all MMFs - DLA levels would be raised to 15% of their assets and WLA levels to 50% of theirs

• removing the regulatory link between (a) liquidity levels in stable NAV MMFs and (b) the need for the manager to consider or impose tools such as liquidity fees or redemption gates. This aim of such 'delinking' is to make those MMFs' liquidity buffers more usable.

Although feedback received to the CP was broadly supportive of most of the proposals (and almost universally in support of delinking), a significant majority of respondents raised concerns over the proposed increase in MMF liquidity levels.

Following the consultation, the FCA and the Bank of England (BofE) undertook further work to form an updated judgement on appropriate levels of resilience for MMFs (see the BofE's system-wide exploratory scenario exercise.

As a result, the FCA considered that it is appropriate to adjust the previously proposed liquidity standards, leading to its new statement.

The other measures set out in the CP, including delinking and enhanced Know Your Customer requirements on investor concentration and the risk of correlated withdrawal, will, in large part, be introduced (subject to final consideration and sign-off within the FCA).

Next steps

As noted above, the UK Government expects to introduce legislation to repeal the MMFR by the end of 2026.

The FCA plans to make its new MMF rules in accordance with this timescale.

A policy statement will provide more detail on the updated proposals and interim final guidance on UK MMF WLA levels will also be published before this.