COLL 7.1.5 What is an Approved Money-Market Instrument

(1) For these rules, an approved money-market instrument is a money-market instrument that is normally dealt in on the money market, is liquid and has a value that can be accurately decided at any time.
(2) For this rule, a money-market instrument is normally dealt in on the money market if any of the following apply to it:
(a) it has a maturity at issue of no more than 397 days;
(b) it has a residual maturity of no more than 397 days;
(c) it undergoes regular yield adjustments in line with money market conditions at intervals of no longer than 397 days;
(d) it has a risk profile, including credit and interest rate risks, corresponding to the risk profile of an instrument—
(i) that has a maturity mentioned in paragraph (a) or (b); or
(ii) that is subject to yield adjustments mentioned in paragraph (c).
(3) For this rule, a money-market instrument is liquid if it can be sold at limited cost in an adequately short time, taking into account the obligation of the operator to redeem units on the instructions of any unitholder.

Note See r 8.1.17 (3) (Issue and redemption generally—QFC retail schemes).
(4) For this rule, a money-market instrument has a value that can be accurately decided at any time if accurate and reliable valuation systems are available for it.
(5) The valuation systems must meet both of the following requirements:
(a) they must enable the operator to calculate a net value of a money-market instrument in accordance with the value at which the instrument could be exchanged between knowledgeable, willing parties in an arm's length transaction;
(b) they must be based either on market data or on valuation models, including systems based on amortised costs.
(6) A money-market instrument that is normally dealt in on the money market and is admitted to or dealt in on an eligible market must be presumed to be liquid and to have a value that can be accurately decided at any time unless there is information available to the operator that would lead to a different decision.

Note Eligible market is defined in r 7.1.7.
Derived from QFCRA RM/2010-05 (as from 1st January 2011)