Post by jannikki on May 3, 2006 19:07:46 GMT -4
SEC nearing decision on fund-rule comment period
By Robert Schroeder, MarketWatch
Last Update: 4:41 PM ET May 3, 2006
WASHINGTON (MarketWatch) -- Federal securities regulators are getting closer to deciding whether to reopen for public comment a controversial rule about mutual-fund governance, the chairman of the Securities and Exchange Commission said Wednesday.
"We're a few days closer" to a decision about the agency's next step on the rule, Chairman Christopher Cox told reporters following a hearing of the House Financial Services Committee.
Earlier this month, a U.S. appeals court handed the rule back to the agency. It requires 75% of a mutual fund's board members, including its chairman, to be independent from management. The court said the agency, which polices Wall Street firms, didn't allow enough public comment on the costs of the rule.
The U.S. Chamber of Commerce, a business group representing a wide variety of companies, sued the SEC over the rule. The appeals court has sent it back to the SEC twice.
Supporters of the rule say independent directors and chairmen ensure a voice for shareholders in fund decisions, and several funds already have independent chairmen.
But any new debate over the rule is likely to result in a fierce battle at the SEC, where it originally passed under the leadership of former chairman William Donaldson. Republicans Cynthia Glassman and Paul Atkins, who initially voted against the rule, remain on the commission and would likely continue to oppose the measure.
Cox declined to say Wednesday if he supports the rule, but acknowledged it could become a "flashpoint" between the SEC's five voting members. "I will be very considerate" of all commissioners' views about the rule, he said.
The tussle over the rule comes as a new director is about to take the helm at the agency's division of investment management. Andrew "Buddy" Donohue is scheduled to join the SEC on May 15.
www.marketwatch.com
By Robert Schroeder, MarketWatch
Last Update: 4:41 PM ET May 3, 2006
WASHINGTON (MarketWatch) -- Federal securities regulators are getting closer to deciding whether to reopen for public comment a controversial rule about mutual-fund governance, the chairman of the Securities and Exchange Commission said Wednesday.
"We're a few days closer" to a decision about the agency's next step on the rule, Chairman Christopher Cox told reporters following a hearing of the House Financial Services Committee.
Earlier this month, a U.S. appeals court handed the rule back to the agency. It requires 75% of a mutual fund's board members, including its chairman, to be independent from management. The court said the agency, which polices Wall Street firms, didn't allow enough public comment on the costs of the rule.
The U.S. Chamber of Commerce, a business group representing a wide variety of companies, sued the SEC over the rule. The appeals court has sent it back to the SEC twice.
Supporters of the rule say independent directors and chairmen ensure a voice for shareholders in fund decisions, and several funds already have independent chairmen.
But any new debate over the rule is likely to result in a fierce battle at the SEC, where it originally passed under the leadership of former chairman William Donaldson. Republicans Cynthia Glassman and Paul Atkins, who initially voted against the rule, remain on the commission and would likely continue to oppose the measure.
Cox declined to say Wednesday if he supports the rule, but acknowledged it could become a "flashpoint" between the SEC's five voting members. "I will be very considerate" of all commissioners' views about the rule, he said.
The tussle over the rule comes as a new director is about to take the helm at the agency's division of investment management. Andrew "Buddy" Donohue is scheduled to join the SEC on May 15.
www.marketwatch.com