JPMorgan Asset Management is planning to close one of its 1 billion European money market funds.
The move is in response to impending regulation that threatens to wipe out the continent’s 450 billion fixed-value money market fund industry, the Financial Times has reported.
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According to the report, JPMorgan is also planning to merge its 949 million Euro Government Liquidity fund into its 11.1 billion Euro Liquidity product.
Jim Fuell, European head of liquidity at JPMorgan, said that the closure was due to the prolonged ultra-low interest rate environment.
Earlier this year, European Commission has proposed the constant net asset value (NAV) money funds to build up a buffer of 3% of their assets to help funds that suffered during the financial crisis.
"The Euro Liquidity fund has access to a broader investment universe and is better equipped to cope with the low-rate environment. The merger is not due to rule changes and we remain fully committed to our money fund business," Fuell added.
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By GlobalDataAdditionally, the firm has shut down its Euro Government Liquidity fund in July last year when the European Central Bank lowered the deposit rate from 0.25% to zero.
