SEC Proposes Sarbanes-Oxley Related Requirements for Audit Committees of Exchange Listed Issuers Including Investment Companies.
Pursuant to the Sarbanes -Oxley Act, the SEC proposed rules that would prohibit a national securities exchange or securities association from listing an issuer that does not meet certain requirements relating to audit committee responsibilities, composition and powers. The application of the proposed rules to investment companies would be limited to funds that trade in secondary markets, i.e. closed-end funds and ETFs organized as open-end funds.
Under the SEC proposal, the audit committee of a listed fund must be directly responsible for the compensation and oversight of the work of any auditor the fund employs. In addition, each member of a listed fund’s audit committee must be a board member and must be independent. For a fund director to be "independent" the director may not, other than as a member of the board of directors (including any of its
