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WASHINGTON, D.C.—The Securities and Exchange Commission (SEC) should close its rulemaking requiring that the chair of the board and 75 percent of directors of mutual funds be independent without imposing any further regulatory obligations, according to comments submitted today by the U.S. Chamber of Commerce.

 

“If the SEC’s mutual fund rule was ever needed, it is not needed now,” said David
Hirschmann, Chamber senior vice president. “Investors have myriad choices if they decide to invest in funds with independent directors. Government intervention in this regard is wholly unnecessary.”

 

The Chamber said the SEC should not intervene in the financial markets or limit investor choice without compelling evidence of a need for regulation, and without establishing that the proposed restrictions would deliver the benefits promised. The Chamber maintains that the mutual fund rule would impose substantial costs on investors and the industry, especially smaller funds, as well as reduce competition and capital formation.

 

“The Chamber is deeply committed to the protection of mutual fund investors—and to the promotion of efficiency, competition, and capital formation in the financial markets,” said Hirschmann. “It is clear that that independent chair and 75 percent independence provisions fall short of their stated goal and would in fact have significant adverse consequences for investors and the industry.” 

 

The U.S. Chamber of Commerce is the world’s largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.

 

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Editor’s note:  The comments can be viewed here.