(Bloomberg) -- BlackRock is urging U.S. regulators to exclude ETFs from potential rules that could crimp investment returns.

A proposal issued by the Securities and Exchange Commission in September would require mutual funds and ETFs to hold more assets that can be easily sold during market routs. The SEC’s plan addresses concerns that investors could be harmed if they try to flee funds that hold a lot of high-yield bonds and other riskier debt. That’s what triggered the collapse of the $788.5 million Third Avenue Focused Credit Fund last month.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.