The Securities and Exchange Commission voted unanimously last week to revisit the controversial independent chairman rule, reopening it for 60 days to public comment on its costs and "any issue related to the underlying purpose of the independence requirements, which is the protection of funds and fund shareholders."
The Commission is also specifically seeking comment on whether the rules will promote efficiency, competition and capital formation.
In response to a second lawsuit against the rule that the U.S. Chamber of Commerce filed, the U.S. Court of Appeals for the District of Columbia Circuit ruled in April that the SEC had violated the Administrative Procedure Act by not affording an opportunity for public comment on certain data the Commission used to estimate the costs of complying with the rules. The court ordered the SEC to file a status report within 90 days.
"The Commission takes seriously our obligation in rulemaking to solicit and fully consider the public's views," said SEC Chairman Christopher Cox. "I have every confidence that the process will result in mutual fund governance that both protects and promotes their interests."
The 5-0 decision is something of a victory for Cox, as votes on the rule under his predecessor, William Donaldson, were split. The rule would require 75% of fund directors, including the chairman, to be independent of fund company management.
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