Don't mourn the stable $1-per-share money-market mutual fund just yet.
Firms including Federated Investors Inc. are suggesting that fund companies can avoid new U.S. Securities and Exchange Commission (SEC) requirements to show share-price variations by limiting holdings to very short-term corporate debt.
Fund sponsors warned after the SEC adopted rules for institutional prime funds that a floating price would put off corporations that use the products to manage billions in spare cash. Two months later, Joseph Lynagh, head of money markets and short cash funds at Baltimore-based T. Rowe Price Group Inc., is saying some fund companies will absolutely roll out products to take advantage of the loophole. T. Rowe Price, he said, isn't planning any such products.
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