Paper tiger? Academics scorn fund reform.(FundReporter)(Investment companies)(Brief Article)

Research, January, 2005

AS THE FUND industry continues to contort itself to cope with an increasing regulatory burden and prepare for future reforms on the horizon, two finance professors are questioning whether all the fuss is actually doing any good.

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Steve Ferris and Sterling Yan, both at the University of Missouri's Columbia College of Business, have concluded that recent rules imposed on fund companies "may not be as effective as originally anticipated by regulators." In particular, the new requirement for mutual funds to fill at least 75 percent of their boards with outside directors met with Ferris and Yan's scorn.

"There is no evidence to show that funds with independent chairs charge lower fees or have a greater level of compliance...

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