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Moody's Analysts Predict MMF Industry to Shrink

Moody’s analysts are predicting that the money market fund reform proposal being considered by the SEC will cause some smaller providers to go out of business, according to Bloomberg.  The proposal is reported to require institutional prime funds to float their NAV.  Moody’s has found that this “would have a significant impact” on cash-management products available to investors, investor preferences and industry composition.  This would “lead to a reshaping of the industry, as some funds close or consolidate, and some of the smaller money-market fund managers either exit the business or reassess their business models.”  The Moody’s report is available for purchase here.