Memo to SEC: Don't Let Independent Chair Rule Die

Although regulators proposed a host of new fund-related rules in the wake of the mutual fund trading scandal that surfaced in 2003, by far the most contentious was one that would require fund boards to have an independent chairman as well as a three fourths majority of independent directors. (The standard is currently two thirds.) The Securities and Exchange Commission actually signed off on the rule in the waning days of former Chairman William Donaldson's tenure, but a 2005 appeals court decision forced the SEC to reconsider it, noting that the commission hadn't adequately considered the costs and benefits of the rule before pushing it through.