BOSTON - The SEC may ease its original stand on the amount of personal information mutual fund directors must disclose in SEC filings about the business relationships of members of their extended families, according to a high-ranking SEC official.

Mutual fund directors have responded with "a passion" in opposing aspects of a proposed SEC rule that would require independent fund directors to reveal in SEC filings the business relationships that directors' extended family members have with a fund company or fund company affiliate, said Robert Plaze, associate director of the SEC's division of investment management. The SEC is sympathetic to objections that it can be difficult to learn all of the business relationships of extended family members, Plaze said.

Plaze stopped short of predicting that the SEC would modify its proposed rule, which would require that funds include in SEC filings information about the business relationships that directors' in-laws have with fund companies. But a reduction in the scope of the original proposal is possible, Plaze said.

"I think there is a great deal of sympathy from the staff on this," Plaze said.

Plaze made his remarks during an interview and at a conference here Feb. 10 that the National Association of Corporate Directors of Washington, D.C. and a civic group that sponsors education programs for directors, the Directors Roundtable of Los Angeles, sponsored. More than 200 mutual fund executives, lawyers and consultants attended.

The SEC on Oct. 13 issued a wide-ranging package of rule proposals designed to strengthen the role of independent directors for funds. As part of the new rules, the SEC proposed that directors disclose in proxy statements and in statements of additional information - part of fund registration statements - information about family members that have ties to fund companies. The proposed rules, for example, would require directors to reveal loans in-laws have with the advisory firm that manages the fund the director oversees.

Directors, fund industry lawyers and the Investment Company Institute criticized the proposal in letters last month as overreaching. In the letters, executives, directors and lawyers said the SEC proposal was unworkable and unfairly delved into the privacy of individuals who may have only a distant personal relationship with a fund company director.

The eight independent directors of the mutual funds of Alliance Capital Management LP of New York, for example, said they expected at least some directors would not be able to obtain information about financial matters from some relatives.

The "public disclosure of information of this nature is unduly intrusive into the private and personal financial affairs of such individuals and their families, to an extent clearly disproportionate to any evident public benefit," the Alliance directors wrote in a letter to the SEC Jan. 27.

The SEC received more than 150 letters on its package of proposals, Plaze said. It is unclear when the SEC will issue final rules, he said.

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