As expected, the U..S. Chamber of Commerce went to court Monday to fight a new SEC rule requiring mutual fund boards to be headed by independent directors. The Chamber of Commerce filed an emergency motion in the U.S. Court of Appeals for the D.C. Circuit seeking to block the rule that also requires three-quarters of board members to be independent. A ruling is expected by October 18.
The Chamber of Commerce also asked for an expedited hearing on the matter in the case that its stay is not enacted by the court. It had already filed lawsuits filed in the Circuit Court and the U.S. District Court for the District of Columbia as part of an effort to fight the rule. In addition, it had asked the SEC to put off implementing the rule until the suit is completed. The SEC rejected that request.
Despite the rushed nature of the filing, fund firms have plenty of time to get ready to comply with the rule. They will not need to comply with the rule until mid-January in 2006. The rule past the SEC on a 3-2 vote with only SEC Chairman William Donaldson crossing party lines.
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