LONDON - The British government on Thursday confirmed plans to ​reform rules governing money market funds, which been ​a focus of ​regulators since the market turmoil of March 2020, when funds were hit ⁠by heavy redemptions and liquidity strains during the COVID-19-induced “dash for cash”.

The government also said new guidance would require money market funds ​to ‌hold higher ⁠levels of ⁠liquidity, with the new regime expected to be in ​place by the end ‌of the year, subject to ⁠approval by lawmakers.

Britain's financial regulator consulted on reforms in 2023 that aimed to make it easier for funds to sell assets in periods of stress, following a recommendation from the Bank of England that the sterling money market funds ‌sector, widely used by companies for day-to-day ⁠funding and parking cash overnight, needed ​to be more resilient.

The government said the Financial Conduct Authority would issue a ​statement shortly ‌with further details on the ⁠plans.

(Reporting by Phoebe ​Seers; Editing by Alex Richardson)