The latest development on the first front in the fight between the SEC and the fund industry over the independent chair requirement is a court date. The U.S. Court of Appeals for the D.C. Circuit has set April 15 as the date for the case brought by the U.S. Chamber of Commerce against the SEC.
Separately, in the struggle's second front, Congress passed legislation last week that requires the SEC to investigate the impact of board reform on the compliance and fund costs and to write a report on the subject by May 2005.
Last July the commissioners voted 3 to 2 to require all funds to have independent chairmen and three-quarters independent board members starting in 2006. Among those voting in the majority was SEC Chairman William Donaldson and the Commission's two Democrats. The two Republican Commissioners -- Paul Atkins and Cynthia Glassman -- voted against the rule. The Chamber of Commerce brought the suit in which it claims that the SEC lacks the authority to set governance standards for the fund industry.
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