BlackRock Inc. and Western Asset Management Co. are offering a new twist on traditional money-market funds as regulators are set to impose sweeping changes on the $2.58 trillion industry.

BlackRock, the world's biggest money manager, and Legg Mason Inc.'s Western Asset unit have started bond funds designed to work much like money funds, with a key difference. The new “ultra-short” funds have share prices that fluctuate along with the value of their holdings, rather than a fixed net asset value, or NAV, a distinguishing feature of money funds. They also have shorter maturities than similar ultra-short bond funds that ran into trouble when credit markets froze in 2008.

The firms are preparing for what could be a seismic reallocation of assets by institutional investors and corporate treasurers if regulators overhaul money funds for a second time in three years in a bid to make them safer after the 2008 collapse of the Reserve Primary Fund. The U.S. Securities and Exchange Commission plans to order a floating NAV on institutional prime money-market funds, or those that invest in corporate debt, overriding opposition from the industry.