In Security and Exchange Commissioner Paul Atkins’ speech at the November 28 Independent Directors Council meeting in San Francisco, Atkins stated that Securities and Exchange Commission formal guidance for independent fund directors is needed. Valuation is cited as an area in need of such formal guidance, which is achieved through the SEC’s rulemaking and public comment process. Pending such guidance, “boards should use the events in the subprime market as a reminder of the importance of having robust valuation procedures and monitoring them to make sure they are working.” Atkins also asserted that the SEC should also formally update the factors a board needs to consider in approving or continuing a Rule 12b-1 plan.

Atkins also highlighted the recent summary prospectus proposal of the SEC. In addition, Atkins discussed the SEC’s efforts in mitigating the costs of Sarbanes-Oxley Section 404 internal control evaluations and audits, an upcoming SEC roundtable on the application of International Financial Reporting Standards in the fund industry, and balancing the benefits and costs of class action securities litigation.