WASHINGTON - If the test for success for new regulations is that they contain a little something to annoy just about everyone, the SEC staff has hit a home run with the rules it has proposed for mutual fund directors.

The SEC's proposed rules governing mutual fund directors either go too far or do not go far enough in altering mutual fund governance, according to lawyers, regulators and industry observers. Proposals that require more disclosure from mutual fund directors and define what makes a lawyer who represents directors independent go too far, some industry lawyers said in interviews during the past two weeks. The SEC issued the proposed rules Oct. 13.

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