A Securities and Exchange Commission official Thursday expressed doubts about two SEC proposals put forth by his colleagues aimed at cleaning up the mutual fund industry, Reuters reports.
Commissioner Paul Atkins told members of the Securities Industry Association at a fund reform conference he had "severe reservations" about requiring fund boards to have an independent chairman. He said that having an independent chairman is not a panacea for the wrongdoing plaguing the industry and that some firms that had independent chairman still found themselves on the hot seat for trading improprieties.
- Atkins also scoffed at the notion that a mandatory 2% redemption fee on fund shares sold within 5 days of purchase would solve the market-timing problem. "At most its a bandage," he said. He believes the best way to stamp out abusive market timing would be for funds to implement a fair-value pricing model to prevent investors from taking advantage of stale prices.
The SEC voted 4 to 1 on Wednesday to seek public comment for at least 45 days before making a final decision.