"The challenge is that now the US rules are set, the current European proposals hew much closer to those US rules," says Sean Tuffy, head of regulatory intelligence at Brown Brothers Harriman, the financial services group.
"But the market is structurally very different."
While the US market has a very high retail share - Mr Tuffy's
parents in Boston can write cheques from their money market fund - in Europe most of the assets in such funds are institutional, from corporate treasuries, which see the funds as a cash-management tool.
Another distinction, which increases the risk that legislation could cause problems, is that much of the assets in European money funds are from outside the continent, in particular from Asia.
It is hard to get a precise handle on the proportion of assets coming from overseas, as there is no requirement to report it, says Mr Tuffy
says the money market fund providers among his
clients are concerned about the prospect of regulation that would make their products unsaleable in particular jurisdictions or to particular client groups.
cites the example of a Luxembourg-based constant value fund marketed to corporate treasurers in Japan, who might not be permitted to hold the same fund if it were of variable value.
According to Mr Tuffy
, money market fund providers in the US have already moved from announcing their plans to adapt existing products to the new regulations to "rumblings of a second wave of announcements looking at alternative structures to reconstitute prime money market funds".
describes this as "money flowing around the obstacles to meet what the market wants", but says European investors "are going to have a harder time getting around the rules".