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United States. Securities and Exchange Commission

Independent Director Search Service Sees Limited Interest from Fund Managers

Strategic Insights

— 1 min read

Despite the looming January 16, 2006, compliance date for new Securities and Exchange Commission rules requiring that 75% of a mutual fund board be independent, an independent director search service has received little interest from fund managers looking to find qualified candidates. Irving Straus, chairman of Straus Corporate Communications, launched the service last August to address this need, but believes the lack of interest is due to the ongoing debate around the 75% rule and the fact that the regulation does not take effect until 2006. Straus remains optimistic, citing a roster of 50 interested and qualified individuals who could serve as independent directors.

Key Takeaways:

  • The independent director search service was launched in August by Straus Corporate Communications to help fund managers find qualified independent directors ahead of the January 16, 2006, compliance date for new SEC rules.
  • Despite receiving little interest from fund managers, Straus believes the service is needed and can provide qualified candidates who understand the business and are not simply high-profile individuals.
  • Straus attributes the lack of interest to the ongoing debate around the 75% rule and the fact that the regulation does not take effect until 2006.
  • Straus has a roster of about 50 people who have expressed interest in being a director and are qualified to serve in this role.
  • Some funds have indicated that they can handle the requirement from within and do not need an outside search service.

Statistics:

  • 75%: The percentage of a mutual fund board required to be independent under new SEC rules.
  • 50: The number of people on Straus' roster who are interested in being a director and have the relevant qualifications.
  • January 16, 2006: The compliance date for new SEC rules requiring that 75% of a mutual fund board be independent.
  • August: The month when Straus Corporate Communications launched the independent director search service.

Sources:

  • Straus Corporate Communications
  • Securities and Exchange Commission

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