New money market regulations went into effect Friday after a year that saw institutional investors pull hundreds of billions of dollars from prime U.S. money market funds.
Despite the outflows, money managers in the $2.5 trillion money market industry aren't being severely hurt so far. In fact, they are accelerating the trend out of the prime funds by converting the assets in prime funds to government money market funds, which aren't subject to the new Securities and Exchange Commission rules.
Year-to-date through Oct. 12, institutional assets in prime money market funds decreased 82.6% to $151.73 billion from $873.98 billion, according to data from the Investment Company Institute. Government money market funds, on the other hand, have seen institutional assets increase 77.4% to $1.552 trillion from $874.91 billion during the same period.