The number of prime money funds in the $2.7 trillion industry, which can invest in corporate debt in addition to government securities, is forecast to fall to 264 from 492 last August after new rules from the Securities and Exchange Commission go into effect on October 14, research firm iMoneynet said on Wednesday. Since July, some US prime money market funds, which had been major holders of commercial paper and other bank debt, have changed over to funds that hold only government securities.
Government-only money funds are exempt from rules on share value and fees from the upcoming SEC rules on net asset values (NAV) and fees during times of market turbulence such as the global financial crisis.