Eight leading managers of money-market mutual funds urged the SEC to alter the way it defines retail funds in proposed new rules for the industry.

The companies, including Fidelity Investments in Boston and New York-based BlackRock Inc., urged the commission in a letter yesterday to limit ownership of retail funds to “natural persons,” typically those with a social security number. The SEC has proposed that only funds restricting daily redemptions to $1 million be classified as retail.

The definition is important because retail funds, along with those that invest only in debt backed by the U.S. government, would be exempt from the most transformative rule proposed for money funds in the commission’s effort to make them safer. Institutional funds eligible to invest in corporate and municipal debt would be forced to abandon their traditional $1 share price in favor of a floating value.

“The proposed daily redemption limit would be burdensome to implement for both funds and third-party intermediaries, resulting in significant costs and operational complexity,” the companies wrote in the letter. “We believe that there is a simpler and more cost effective way to achieve the Commission’s goal of providing an exemption for retail investors.”

Vanguard Group Inc., Invesco Ltd., Legg Mason Inc., T. Rowe Price Group Inc., Northern Trust Corp. and Wells Fargo & Co. also signed the letter.

A push to make money funds more stable began after the Sept. 2008 collapse of the $62.5 billion Reserve Primary Fund, whose closing triggered a wider run on money funds, helping to freeze global credit markets.

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