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U.S. Securities and Exchange Commission

Speech by SEC Chairman:
Remarks at the Commission Open Meeting


Chairman Harvey L. Pitt

U.S. Securities and Exchange Commission

Washington, D.C.
January 23, 2003

Good Morning. This is an open meeting of the Securities and Exchange Commission on January 23, 2003.

It's also our last open meeting of January -- the most productive month in the SEC's history. And, there are still eight days to go before February!

With all the open meetings we've had lately, some may think I spend too much time at the outset praising our Staff's Herculean efforts. But, to the contrary, I don't think I can say enough to impress upon the public just how dedicated and effective our Staff has been. They've sacrificed evenings, weekends, and holidays to implement Sarbanes-Oxley reforms, all within the timeframes provided by Congress. At the same time, the Staff has continued to do the day-to-day work necessary to carry out this agency's investor protection mission. Today's items reflect the Staff's unflagging dedication to this mission.

The first item is a recommendation from our General Counsel to adopt rules setting forth minimum standards of professional conduct for attorneys who represent public companies before the Commission. As I've said before, attorneys who represent public companies have public responsibilities. These rules are designed to protect investors and increase their confidence in public companies by ensuring that attorneys who work for those companies do not ignore evidence of material misconduct. These rules implement Section 307 of Sarbanes-Oxley.

The next item on the calendar is a pair of recommendations from the Division of Investment Management regarding proxy voting by investment companies and investment advisers. In thinking about these recommendations, I start from the fundamental and unassailable proposition that mutual fund securities are held for the benefit of the individuals who own mutual fund shares. Voting decisions by funds and advisers have an enormous impact on the financial well being of millions of ordinary citizen-investors. But despite the influence this voting power can have, many mutual funds and investment advisers don't disclose the policies they use in deciding how to vote portfolio securities. Because the securities are held for the benefit of the investors, they deserve to know the fund's proxy voting policies and whether they were in fact followed. Many wield voting power in the face of conflicts; they may cast votes furthering their own interests rather than those for whom they vote.

The rules we consider today have generated an enormous amount of public interest. We've received approximately 8,000 comment letters, the overwhelming majority of those from individuals who support the rules. This is an initiative I have supported from the inception of my tenure, eighteen months ago. Having now heard the arguments of both supporters and opponents, I'm more convinced than ever that these rules, which fulfill our continuing commitment to the bedrock principles of transparency and adherence to fiduciary duties, are in all of our interests.



Modified: 01/23/2003