The harshest criticism of the Moody's plan came from Peter Crane, founder of Crane Data, which tracks money-market funds.

"These proposals are going down [among fund companies] like a lead zeppelin," said Peter Crane, founder of Crane Data. "Tweaking the ratings criteria is one thing, but moving away from AAA-ratings is sacrilege."

"It will take years or decades to condition people to this new system," he added.

None of the firms MarketWatch spoke to was willing to comment openly on the issue, though many of them planned to offer their critiques directly to Moody's this week. One money-market fund manager said he was "very much against" Moody's judging fund sponsors in such a way.

However, none of them opposed the proposal as strenuously as Crane, though some sympathized with his stance.

Crane said he believed there was industry objection to the range of ratings available, arguing that five tiers seem unnecessary--according to Crane Data just six taxable money-market funds are now rated A--two levels below AAA--and none have a rating below that. Crane questioned whether funds would pay to be given a lower rating.

Moody's defended its proposals.

"We've spent a lot of time thinking about this," said Serrao. "We believe there's a need for differentiation among funds."

"What we are proposing is a big change, but one that we think will ultimately be of benefit to investors and the industry," he said. "We expected to have a dialogue with the industry and we hope that it's a two-way dialogue."

Crane questioned how Moody's would determine whether a fund's parent company could or would step in and support it.