Securities and Exchange Commission Chairman Christopher Cox has said that the agency is leaning towards opening another public-comment period on its stalled governance rules for mutual funds.
After testifying before a Senate committee this week, Cox said that the commission wasn't yet ready to scrap the rules in the face of court opposition, according to published reports.
Earlier this month, a federal court sent rules governing the mutual fund industry back to the SEC for a third time, ordering the regulator to reflect further on the costs of the changes. The rules would mandate that fund board chairmen and three quarters of fund directors have no direct ties to the manager of the fund.
At the time, the court said that it would wait 90 days before invalidating the rules, in order to give the SEC another chance to make its case and hear comments from the public.
The U.S. Chamber of Commerce had challenged the proposal from the get-go on a number of procedural arguments. The SEC originally adopted the rule in the summer of 2004, when the $7 trillion mutual fund industry was embroiled in a series of late-trading scandals
Cox's predecessor, Republican William H. Donaldson , had voted with the SEC's two Democrats to pass the rule's most recent reincarnation on his last day in office in June 2005.
