Eight mutual fund managers have asked the US Securities and Exchange Commission (SEC) to change the definition of retail funds in the proposed rules laid for the industry.

According to the SEC’s new rules, only funds that restrict daily redemptions to $1 million will be classified as retail funds, which were not accepted by many fund managers.

The manager sought the importance of retail funds as it would be exempt from the new rules proposed for money funds, reported Bloomberg.

Institutional funds eligible to invest in corporate and municipal debt would be forced to abandon their traditional $1 share price in favour of a floating value, claimed the fund managers.

The fund managers including Fidelity Investments and BlackRock wrote in a letter to SEC that the proposed daily redemption limit would be burdensome to implement for both funds and third-party intermediaries, resulting in significant costs and operational complexity.

"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," according to the fund managers.

Fidelity and BlackRock were joined by Vanguard Group, Invesco, Legg Mason, T Rowe Price Group, Northern Trust, and Wells Fargo in seeking the change.