he SEC is stepping nearer to a vote on the controversial proposed rule that would require fund firms to disclose how they vote their proxies. The Commissioners will vote next Wednesday on the rule, reports the Wall Street Journal
. The paper adds that the rules have been modified in reaction to early feedback from both investors and the fund industry, but it did not add what those modifications are.
The vote has taken a surprisingly high profile. Yesterday, for example, representatives of the AFL-CIO held demonstrations at 19 Fidelity brokerage offices to express support for the proposal. In addition, a number of social investment funds, including Pax and Citizens, have taken positions in support of the proposed rule.
While the ICI's opposition to the bill came as a surprise, the issue did highlight the practices of TIAA-CREF, which was recently faced with a shareholder proposal requiring it to share how it voted proxies with its own fund shareholders. That proposal was voted down at the firm's annual meeting.
If at least four commissioners vote in support of the rule at next week's meeting, the SEC would then open a public comment period on the rule.
The timing of the vote is interesting as it will fall during the lame-duck period for Chairman Harvey Pitt. There are reports that the Bush administration hopes to name its proposed replacement for Pitt by the end of next week. The candidate would then be presented to the Senate when it convenes in January.
The leading contenders for the post, according to the Washington Post
, are Stephen Hammerman
and T. Timothy Ryan Jr.
Hammerman is deputy commissioner of legal matters at the New York Police Department and was vice chairman and general counsel at Merrill Lynch until last April. Ryan built his reputation cleaning up the savings-and-loan crisis as director of the FDIC in the first Bush administration. He is currently managing director of the Global Government Institutions Group at J.P. Morgan Chase & Co. Two additional names on the short list are NASD Chairman Robert Glauber
and Treasury Undersecretary Peter Fisher
The paper adds that the White House has nixed Erskine Bowles
as a possible replacement for Pitt. Bowles lost the North Carolina Senate race to Elizabeth Dole last month and is reportedly a favorite of Wall Street.
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