BlackRock Inc., the world's largest asset manager, said it wouldchange its lineup of money-market mutual funds to make them complywith new federal regulations.

In an April 6 letter to investors, BlackRock said it would offerfunds that invest solely in government securities and others withfloating net asset values that would invest in corporate debt. Thecompany said it would have funds that limit holdings to securitieswith maturities of seven days or less. The firm also said it willoffer separately managed accounts and private funds on a “limitedbasis.”

BlackRock joins companies such as Fidelity Investments andFederated Investors Inc. in making changes to its lineup after theU.S. Securities and Exchange Commission last year wrote new rulesfor how non-government and institutional money market funds shouldoperate. Under the new system, which takes effect in October 2016,institutional funds that invest in non-government securities willhave to have a floating share price and impose redemption fees andgates in times of market stress.

“The big companies are offering a range of choices, because noone knows exactly what customers will want,” said Peter Crane,president of Westborough, Massachusetts-based Crane Data, a moneyfund researcher.

According to Crane's website, BlackRock has $217.5 billion inmoney-market assets, making it the third largest U.S. provider ofthe funds. Boston-based Fidelity ranks first, and JPMorgan Chase& Co., based in New York, ranks second.

BlackRock's short-maturity fund could buy corporate debt, thecompany said in its letter, which was first reported by the WallStreet Journal. The seven-day limit means the fund “would beunlikely to trigger redemption gates and liquidity fees,” accordingto BlackRock.

Bloomberg News

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.