A proposal in the new fund disclosure bill that would preclude anyone with business or personal ties to a fund company from serving as an independent member of the board has many in the fund industry hotly contesting the idea, Reuters reports.

Paul Haaga, chairman of the Investment Company Institute, testified before Congress last week that while such people might be viewed as "valuable board members because of their extensive knowledge of the industry, [the ICI] has concluded that their prior service may affect the directorsÂ’ independence, both in fact and appearance." Haaga made the statement as the House Subcommittee on Financial Markets considered the Mutual Funds Integrity and Fee Transparency Act.

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