Congressional Quintet Supports Independent Director Rule
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Tuesday, March 16, 2004

Congressional Quintet Supports Independent Director Rule

The SEC has some friends on Capital Hill after all. Monday, five members of Congress penned a letter to SEC Chairman William Donaldson in support of the commission's proposal to require that three-fourths of fund board seats be held by independent directors.

The letter was signed by letter is signed by: House Financial Services Committee Chairman Michael G. Oxley (OH); House Capital Markets Subcommittee Chairman Richard H. Baker (LA); Senate Financial Management Subcommittee Chairman Peter G. Fitzgerald (IL); Senate Financial Management Subcommittee Ranking Member Daniel K. Akaka (HI); and Senate Permanent Subcommittee on Investigations Ranking Member Carl Levin (MI).

"An independent chairman can foster the type of meaningful dialogue between fund management and independent directors that is critical for healthy fund governance," they wrote in the letter dated March 11. They also contend that oversight by independent directors could prevent the improper behavior at fund firms.

"We thus believe that the commission's proposal to require that mutual fund chairmen be independent from fund management companies is one of the most significant of the commission's mutual fund-related rule-making activities to date," the group wrote.

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