By Nathaniel Popper June 5, 2013 1:07 pm June 5, 2013 1:07 pm

Lucas Jackson/Reuters Mary Schapiro, a former S.E.C. chairwoman, praised the agency but said the proposal needed to cover more.

A new effort to avert the problems that hit money market funds during the financial crisis is already attracting criticism for not going far enough while winning praise from advocates of the money fund industry.

All five members of the Securities and Exchange Commission voted on Wednesday to move forward with a proposal that could force some money market funds to abandon the fixed value of $1 a share that has made them so popular with many investors.

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The potential rule, though, would apply only to about 35 percent of all money market funds, and not to those available to ordinary investors. Another change proposed by the S.E.C. staff would institute penalties for investors who pull their money out of the funds in times of crisis. Both alternatives are intended to prevent the type of destabilizing run that money market funds experienced in 2008 after the share value of one popular money fund “broke the buck” by falling below a dollar a share.

The changes are now open for three months of public comment after which approval will require another vote.

The proposals were devised by the S.E.C. staff after an earlier overhaul effort failed in the face of significant lobbying from the money fund industry. The new recommendations, which were made public on Wednesday, are more limited than top regulators have said in the past is necessary to make money funds safer.

Mary L. Schapiro. the former S.E.C. chairwoman who pushed the previous efforts, said on Wednesday that the agency should be commended for putting a proposal out but needed to go further in overhauling the whole industry.

“I hope the commission will remain open to meaningful reform of the entire sector and not just institutional prime funds,” Ms. Schapiro said.

A few leading advocates of stricter financial regulation said that the proposals in Wednesday’s report were not likely to do away with the current risks that money market funds pose to the financial system.

“It is really worse than no reform at all because it’s false comfort,” said Dennis M. Kelleher, the president and chief executive of Better Markets. “It’s like putting in a nice shiny fire alarm system in a building that doesn’t work.”

Earlier this year, the heads of all 12 Federal Reserve Banks wrote a letter in which they criticized one of the changes called for in the new S.E.C. report — the penalties in times of crisis — and said it could worsen future runs. The penalties were first proposed by BlackRock, one of the largest operators of money market funds.

The new recommendations were released after numerous meetings with representatives of the money fund industry, who have said in the past that no further changes are needed. The industry group, the Investment Company Institute. praised the recommendations.

Alex Roever, a money market analyst at JPMorgan Chase. said the proposals were “much less drastic” than the reforms suggested by a top council of regulators last fall.

“Our initial thoughts on this proposal are that it is favorable for both money fund shareholders and sponsors, and it is unlikely to create any challenges for corporations, financial institutions or other active money market borrowers,” Mr. Roever wrote in a note to clients.

At a meeting on Wednesday morning, S.E.C. staff members said they were limiting the changes to money funds used by big investors because those funds experienced the biggest problems in 2008. The S.E.C. is also leaving alone money funds that invest in government debt, even when those funds are owned by institutional investors.

The S.E.C. staff said that a floating share value should stop investors from thinking about money funds as a guaranteed investment and help prevent extreme responses by investors in times of crisis.

Sheila C. Bair. a former chairwoman of the Federal Deposit Insurance Company, praised a floating share value but argued that it should be applied to all money funds. She said the new proposal “leaves a number of money market funds, fund investors and the markets unprotected and at risk for destabilizing runs. It also creates real incentives for gaming and arbitrage.”

More rules could be added before the final vote, and the S.E.C. staff provided more options.

The top council of regulators, the Financial Stability Oversight Council, said last fall that the S.E.C. should consider proposals that go further than the primary ones put forward on Wednesday, like a floating share value for all money market funds.

Lori Richards, a former S.E.C. official now at PricewaterhouseCoopers, said that after the fighting over previous proposals, the council of regulators “may be content that the S.E.C. is taking the ball now and moving it down the field.”

A version of this article appears in print on 06/06/2013, on page B 7 of the NewYork edition with the headline: S.E.C. Proposes Changes in Money Funds .