The European Securities and Markets Authority (ESMA) has sent its response to the European Commission's consultation on assessing the adequacy of macroprudential policies for non-bank financial institutions (NBFI). ESMA makes key proposals in several areas, including liquidity management, money market fund regulation review, supervision and data, and coordination. ESMA recognizes progress made in liquidity management tools but still sees a need to address liquidity mismatches in open-ended funds. The authority proposes requiring funds that invest in illiquid assets to be structured as closed-ended funds and supports the Financial Stability Board's recommendation on classifying open-ended funds based on asset liquidity. ESMA also reiterates the need to complete the reform of the Money Market Fund Regulation. The authority proposes progressing towards data-driven supervision by harmonizing the framework to analyze risks and developing an EU system-wide stress test. ESMA suggests enhancing coordination between competent authorities by creating a formal reciprocation mechanism for leverage limits and granting ESMA the power to request stricter macroprudential requirements. The European Commission launched the consultation in response to major events and financial stability concerns in recent years. ESMA stands ready to further collaborate with the Commission on its proposals.