Like Bill Clinton's new autobiography, there does not appear to be any secrets remaining to be unveiled in tomorrow's meeting of the Securities and Exchange Commission. Despite lobbying from the ICI and Fidelity's Ned Johnson, the five commishes are expected to approve a new rule that would require funds to seat independent chairmen.
Indeed, news of the likely vote was widely reported on each of the television networks morning news programs and the Wall Street Journal published an article
providing background on the fight leading up to tomorrow's formal vote.
The Journal reports that not only did Fidelity commission a special study on the impact of independent chairmen (the study found that they don't seem to improve a funds' investment performance) but that Ned Johnson personally called on SEC Chairman William Donaldson to ask him not to impose the rule. The paper also reports that in January Johnson also called on an unnamed Putnam trustee to ask that John Hill, the independent chairman of Putnam's funds, withdraw his public support for the bill according to Hill.
The paper adds that Fidelity has also engaged several unnamed "high-profile" lobbying firms to argue its case to Congressmen. Despite the lobbying, the paper also finds that Fidelity's spending on lobbying is relatively unchanged from 2001, but higher than in 2002. The firm spent $870,000 on lobbying in 2003, $639,000 in 2002 and $880,000 in 2001. At $130,000, Fidelity's political contributions are also in line with the $133,875 it gave in the 2001-2002 election cycle.
Also active in lobbying is the Vanguard Group, reports the paper. However, it provides not hard data on Vanguard's efforts as it does on Fidelity's.
Finally, it reports that ICI Chairman Paul Haaga also believes the outcome of the vote is certain.
"I'm not going to hold my breath until I pass out or anything," he told the paper. "We think it's a bad idea. It's not the first bad idea. It won't be the last bad idea."
Sean Hanna, Editor in Chief
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