What significant change occurred regarding money market fund investments in 2016?

In 2016, the significant change that occurred regarding money market fund investments was the requirement for share prices to float. This change was primarily a result of regulatory reforms instituted by the Securities and Exchange Commission (SEC) to enhance the stability and transparency of money market funds following the financial crisis of 2008.

Before this change, many money market funds used a stable net asset value (NAV) of $1.00 per share, which made them appear safe but ultimately contributed to a lack of transparency in the risks they were taking. The shift to a floating NAV means that the price of shares could now fluctuate based on the underlying value of the fund's investments. This reform aimed to better reflect the economic realities of the investments held by money market funds, thus protecting investors and the financial system more effectively.

The other options do not accurately reflect the 2016 changes. While fixed share prices were a feature of many money market funds prior to these regulations, they were no longer permitted for institutional prime money market funds, leading to the floating NAV requirement. The regulations did not eliminate redemption limits, nor did they specifically increase government securities investments, although government funds were less impacted by the floating NAV rule.