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The mutual-fund industry’s main trade group, in what may be the last round of lobbying against tighter rules for money-market funds, rejected this past week a scaled-back proposal to force only the riskiest funds to give up their stable $1 share price.

The compromise, approved by SEC commissioners June 5, would harm investors and the economy, and would increase systemic risk, the Investment Company Institute said Wednesday. The group supported an alternative option offered by the SEC to limit withdrawals when funds come under stress.

The plan would exempt funds that buy only U.S. government- backed securities and retail funds, a concession regulators made to address concerns of fund providers. The debate over the vehicles was sparked by the collapse of the $62.5 billion Reserve Primary Fund, whose closure in September 2008 triggered a wider run on money funds, helping to freeze global credit markets. Some regulators, including ex-SEC Chairman Mary Schapiro, have argued that the funds’ $1 share price makes them susceptible to runs. Her plan to make all money funds adopt a floating value or create capital reserves was blocked by fellow commissioners in August.