SEC Overhauls Executive Compensation Disclosure Rules

Washington, DC, August 29, 2006 - The SEC has approved extensive revisions to its rules governing the disclosure of executive and director compensation, related party transactions, and corporate governance matters.

Background
In February 2006, the SEC proposed amendments to the disclosure requirements for executive and director compensation, related party transactions, director independence, and other corporate governance matters and security ownership of officers and directors. The amendments were designed to make proxy statements, reports, and registration statements easier to understand and provide investors, including investment companies, with a clearer picture of the compensation structure for the company's primary executive officer, principal financial officer, and highest paid executive officers along with members of its board of directors. The amendments would apply to disclosure in proxy and information statements, periodic reports, current reports, and other filings under the Securities Exchange Act of 1934.

The revisions, which contain a limited number of provisions affecting fund disclosures, were adopted substantially as proposed. Funds must comply with the revised rules in registration statements and proxy statements filed with the SEC on or after December 15, 2006.

The SEC also modified its proposal relating to the disclosure of compensation information for certain non-executive employees, and is seeking comment on those modifications.

ICI Position
In April 2006, ICI commented on the proposed amendments, stating that investment companies welcome greater and more meaningful disclosure about executive pay packages. The Institute emphasized that this information is important to investors because it focuses on the compensation paid to the individuals who are the company's decision makers.

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