Article 20
Internal credit quality assessment
1.
The manager of an MMF shall apply the procedure laid down in Article 19 to determine whether the credit quality of a money market instrument, securitisation or ABCP receives a favourable assessment. Where a credit rating agency registered and certified in accordance with Regulation (EC) No 1060/2009 has provided a rating of that money market instrument, the manager of the MMF may have regard to such rating and supplementary information and analysis in its internal credit quality assessment, while not solely or mechanistically relying on such rating in accordance with Article 5a of Regulation (EC) No 1060/2009.
2.
The credit quality assessment shall take into account at least the following factors and general principles:
(a)
the quantification of the credit risk of the issuer and of the relative risk of default of the issuer and of the instrument;
(b)
qualitative indicators on the issuer of the instrument, including in the light of the macroeconomic and financial market situation;
(c)
the short-term nature of money market instruments;
(d)
the asset class of the instrument;
(e)
the type of issuer distinguishing at least the following types of issuers: national, regional or local administrations, financial corporations, and non-financial corporations;
(f)
for structured financial instruments, the operational and counterparty risk inherent within the structured financial transaction and, in case of exposure to securitisations, the credit risk of the issuer, the structure of the securitisation and the credit risk of the underlying assets;
(g)
the liquidity profile of the instrument.
The manager of an MMF may, in addition to the factors and general principles referred to in this paragraph, take into account warnings and indicators when determining the credit quality of a money market instrument referred to in Article 17(7).