Industry Challenges SEC Rule On Fund Directors

Law360, New York (January 5, 2006, 12:00 AM EST) -- The U.S. Securities and Exchange Commission headed to court this week to defend its new regulations regarding mutual fund directors, drafted as part of the ongoing fallout from the fund scandals of 2003.

The U.S. Chamber of Commerce has challenged the SEC's proposed reforms that would require 75% of mutual fund directors and board chairmen to be independent from the management of the fund.

The reforms, passed by the SEC in July 2004, are set to take effect this month.

Current regulation stipulates that only 40%...
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