WSJ.com writes "U.S. Money Funds, Investors Pan SEC's Floating-Value Format". The article says, "Corporate executives say they will pull cash from money-market funds if regulators implement a proposal requiring that funds' share prices float. The pushback comes as the Securities and Exchange Commission is expected to issue new regulatory proposals in the coming weeks. Under one proposal that has gained momentum, regulators would force fund values to float instead of remaining constant at $1 per share. Shifting to an unstable net asset value, or NAV, would be a drastic change for the $2.6 trillion industry as it would mark the first time that the funds wouldn't be perceived any more like bank deposits, giving investors back $1 for every $1 invested. Companies say they would respond by selling out of money-market funds, which they have used for decades because of their cash-equivalent nature.... A wave of redemptions would be just the latest blow to the money-market industry, which is already grappling with yields on the securities they buy languishing near all-time lows. Returns are so low that many fund sponsors have cut their management fees and a few have exited the business. Floating NAVs was among the proposals put forward by the Financial Stability Oversight Council. The rationale was that, if the NAV floated and the price fluctuated, however little, investors would be aware there is risk associated with investments in money funds."
