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SEC Speeches, April 2000

Regulation FD, Independent Directors, Internet Compliance

By John M. Baker, Esq.

Three speeches, one by an SEC Commissioner and two by SEC officials, have been posted to the SEC’s web site in the past week.

Commissioner Hunt spoke on proposed Regulation FD (the proposed regulation on selective disclosure) at the Ray Garrett, Jr. Corporate and Securities Law Institute on April 13, 2000. The SEC had then received over 1000 comments on this proposal, and the comment period (as extended) does not end until April 28. I believe that makes this proposal the most prolific generator of comments on record, except for the proposal on risk disclosures, which was the subject of special promotional efforts. Small investors have been whole-heartedly in support of the SEC proposal, but others have suggested that the proposals are undesirable or premature. Commissioner Hunt stated that, in his view, selective disclosure is a problem the SEC should address today, not a year from now, but that this is not an easy problem to solve. His speech sets out several limiting principles that he believes would improve the proposal.

Commission Hunt’s speech is available online at http://www.sec.gov/news/speeches/spch366.htm

Paul Roye, Director of the SEC’s Division of Investment Management, spoke on “What Does It Take To Be an Effective Independent Director of a Mutual Fund?” at the ICI Workshop for New Fund Directors on April 14, 2000. While there was little that was new in Director Roye’s speech, it was a good summary of SEC thinking in this area, particularly for new directors, and some may wish to provide it to all of your directors.

The speech is available online at http://www.sec.gov/news/speeches/spch364.htm

Lori Richards, Director of the SEC’s Office of Compliance Inspections and Examinations, spoke on “The New Internet Economy – A Compliance Imperative” at the National Regulatory Services Spring 2000 Compliance Conference on April 17, 2000. The speech gives valuable and concrete suggestions for operational capability, best execution, advertising, suitability, investor education, and security for broker-dealers, investment companies, and investment advisers providing online services. The speech is available online at http://www.sec.gov/news/speeches/spch365.htm

Copyright 2000, John M. Baker, Esq., Stradley, Ronon, Stevens & Young, LLP, 1220 19th Street, N.W., Suite 700, Washington, DC 20036 – (202) 822-9611- Fax (202) 822-0140 This article was originally posted to the FundLaw List, http://www.egroups.com/group/fundlaw. To subscribe to FundLaw, send a blank e-mail to fundlaw-subscribe@egroups.com

Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.  

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