The European Union is moving closer to imposing tighter restrictions on money-market funds after years of wrangling, while stopping short of restrictions the industry said would upend the 1 trillion-euro ($1.1 trillion) market.

The plan set for approval by EU finance ministers on Friday would require funds to toughen up risk management and invest in more liquid assets that can be easily traded in volatile markets should investors rush to pull out their money. It offers a way for many funds to continue quoting a fixed share price, known as a constant net-asset value, to banks, corporations and other investors who rely on them for short-term funding.

"It is important to have an agreement on this essential file, to ensure the future stability and viability" of the money-market fund industry, said Jeroen Dijsselbloem, the Dutch finance minister, whose country holds the EU's rotating presidency. The market is "an important source of short-term finance to the real economy," he said on June 15.