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Further Changes for Money Funds?

Proposed legislation in the House and Senate would let funds go back to using stable NAVs.

As the one-year anniversary of new regulations affecting money market funds approaches this fall, the money fund landscape seems permanently altered. The imposition of floating net asset values and fees and gates on institutional prime and municipal funds scared away investors, shrinking the assets held in those types of funds.

That decline, and the impact it had on corporations and state and local governments that financed themselves by issuing short-term debt sold to money market funds, has sparked a legislative response. But the measures proposed in the House and Senate may have a hard time making headway given all the other issues Congress has to deal with.