The
This is the second time in less than 12 months that a federal court has told the SEC that the rules, which were adopted in 2004 in an effort to tighten fund governance in the wake of recent market-timing and late-trading scandals, lacked adequate input.
As passed, the rules require that 75% of all mutual fund board directors be unaffiliated with the fund or fund complex, and that all board chairmen also be independent.
The 3-0 ruling by the
The court "did what we hoped they would do," said Stephen Bokat, executive vice president and general counsel for the Chamber.
Former SEC Chairman William Donaldson lauded the rules as great progress in fund governance during his tenure.
Current Chairman Christopher Cox said Friday, "The Commission will comply with the court's decision in every respect."
Mercer Bullard, president of Oxford, Miss.-based shareholder advocacy group
The Friday ruling maintains that the SEC relied upon non-public information about industry compensation in drafting these guidelines.
Eugene Scalia, an attorney representing the Chamber of Commerce, said it is time for the SEC to give up attempts at passing the rule.
"One hopes that rather than continue to be embroiled in this controversial rulemaking, the commission will accept the court's judgment and move on to other important items on its agenda," he said.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.