The Securities and Exchange Commission said it would forge ahead with a new rule effective January 2006 requiring 75% of mutual fund boards to be comprised of independent directors and overseen by an independent chairman. The U.S. Chamber of Commerce sued the SEC on Sept. 2, charging that it had overstepped its rulemaking authority.
SEC General Counsel Giovanni Prezioso issued a letter saying the SEC voted 3-2 to reject the request. Earlier, Prezioso said: "The Commission carefully complied with its legal obligations in adopting these rules, and we expect to defend them vigorously."
Nonetheless, the U.S. Chamber of Commerce still intends to seek a court order to halt the new rule. The organization brought its lawsuit at the request of a number of mutual fund companies.