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Money Management Executive

Mutual Fund Measure Buried in Spending Bill

November 18, 2004, 1:00 a.m. EST 1 Min Read

The SEC’s recent mutual fund governance rule could run up against a challenge after the spending bill gets passed, Dow Jones Newswires reports. The $388 billion bill includes a measure requiring the SEC to report to Congress on the performance and fees of mutual funds with independent chairmen.

Fidelity Investments and other fund companies support that language, which has the potential to reopen discussion of the SEC’s governance rule requiring at least 75% of a fund’s board to consist of independent directors. Should it turn out that funds with independent chairman do not have lower fees than funds with a chairman from the fund, it could create pressure on the SEC to overturn its governance rule requiring the chairman and 75% of a fund board to be independent.

This measure has largely gone unnoticed, as it is only a small part of the 1,182-page bill.

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