The SEC re-adopted rules requiring investment companies to have independent chairman. The SEC rule requires 75% of the board of an investment company to be independent and the Chairman of the Board to be independent. The SEC action comes after the U.S. Court of Appeals for the District of Columbia Circuit’s decision on June 21, 2005 in Chamber of Commerce v. SEC (69 FR 46378 (Aug. 2, 2004)). In that case, the Circuit Court remanded the previously adopted rule back to the SEC, ordering the reulatory agency to consider:

  • costs of complying with the 75% independent director condition and the independent chairman condition;
  • an alternative to the independent chairman condition.

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