WEST PALM BEACH, FL (www.hedgeco.net) – The plight of the SEC imposed mutual fund governance laws remain uncertain. The legality of the US hedge fund regulations laws passed under the former chairmanWilliam Donaldson still remain in limbo as a Manhattan federal judge continues to listen to arguments in support and against the implementation of that law.
Now a business lobbying group, the US Chamber of Commerce is asking the federal appeals court to block the implementation of the mutual fund governance rules also passed under the former chairman William Donaldson. The controversy surrounding the mutual fund governance laws revolves around the requirement by the law that 75 percent of the fund�s board of directors be independent, meaning such members should be drawn from outside. The hedge fund regulation laws and the mutual fund governance rules are both set for implementation in early 2006.
The Chamber of Commerce argues that the rules did not consider vital issues dealing with public input, possible alternatives, and the cost of implementing such laws. The Chamber of Commerce has asked the U.S. Court of Appeals judge in Washington D.C. to halt the implementation of the law.
Last month, the federal Appeals Court judge sided with the Chamber of Commerce and agreed to return the law to the Securities and Exchange Commission for further review. On June 29, the SEC Commission readopted the rule by 3-2 vote. The Chamber of Commerce sued the SEC again in what is looking like an extended legal battle.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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