WASHINGTON — The Securities and Exchange Commission will issue a proposal to revamp the money-market fund industry “in very short order,” chairman Mary Schapiro said Monday.

Speaking in New York at the annual meeting of the Securities Industry and Financial Markets Association, Schapiro said the SEC is focusing on two options: a “capital buffer” to serve as an emergency cushion for the funds, and a floating net-asset value, which would be a shift from the current stable $1-per-share NAV.

“We cannot let this issue linger,” Schapiro said in her prepared remarks.

Schapiro’s comments come one year after the President’s Working Group on Financial Markets suggested several reforms, including requiring money market funds to move to a floating NAV.

Issuer groups and state and local governments have opposed such a switch, citing the stable NAV as key to their short-term cash management strategies. They have also warned that a floating NAV would reduce investor demand for munis and deprive states and localities of much-needed capital.

In September 2008, the Reserve Primary Fund “broke the buck,” dropping below $1 per share, after the collapse of Lehman Brothers, spurring a run on money market funds and the establishment of a temporary federal guarantee program.

Schapiro said she recalled the destabilizing events that followed that episode and the need for unprecedented government support.

“We all should be committed to preventing that from occurring again,” she said.

A mutual fund group said Schapiro should be commended for recognizing the complexity of the issues.

“Any reforms must preserve the utility of money market funds for investors and avoid imposing costs that would make large numbers of advisers unwilling or unable to continue to sponsor these funds,” Paul Schott Stevens, president and chief executive officer  of the Investment Company Institute, said in a statement. “We are also pleased that the chairman recognizes the many challenges surrounding the proposal to float the NAV, including the impact on businesses, institutions, and retail investors.”

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