he five Securities and Exchange Commissioners
yesterday approved rules requiring the CEO and the CFO at fund sponsors to certify each fund's results. The industry had opposed the rule on the grounds that the sheer number of filings would overwhelm these officials at larger complexes and as a result they would be unable to personally vouch for the results.
The requirement was created by the Sarbanes-Oxley legislation last summer and was intended to prevent additional corporate scandals in the wake of the Enron and WorldCom imbroglios.
The SEC commissioners vote yesterday will apply all of the rules for public companies created by that legislation to both open- and closed-end investment companies and unit trusts. Funds will have to inform shareholders of whether they have an ethics code and of instances when that code is waived. They will also have to disclose whether they have a designated financial expert on the audit committee of the board of directors for the fund.
The decision by the SEC is not the only to effect fund firms scheduled for this week. Tomorrow the commissioners are scheduled to vote on the issue of whether funds should be required to disclose their proxy votes.
In a last ditch effort to influence reporters covering the issue, the Investment Company Institute
yesterday delivered a 932-page sample disclosure document to reporters at a dozen media companies. The book was intended to portray what the industry believes is the unworkability of the requirement.
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