Appeals Court Rejects SEC Mutual Fund Rule

Law360, New York (April 10, 2006, 12:00 AM EDT) -- A U.S. Securities and Exchange Commission rule requiring mutual fund chairmen to be independent from the companies that manage their funds has been rejected by a federal appeals court for the second time.

The U.S. Court of Appeals for the District of Columbia Circuit ruled that the SEC failed to consider the potential costs to the mutual fund industry before passing the rule. The court gave the SEC 90 days to accept public comments and reconsider the rule.

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