R. Bruce Josten
Government Affairs
  1615 H STREET, N.W.
WASHINGTON, D.C. 20062-2000

March 10, 2004

Mr. Jonathan G. Katz
U.S. Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549-0609

Re: File No. S7-03-04
Release No. IC-26323, Investment Company Governance

Dear Mr. Katz:

The U.S. Chamber of Commerce, the world's largest business federation with more than three million businesses and organizations of every size, sector and region, applauds the Securities and Exchange Commission on its efforts in restoring investor confidence, as well as assisting individuals in making well-informed investment decisions.

We appreciate the opportunity to comment on the Commission's proposal to strengthen the corporate governance practices of mutual funds and other investment companies registered under the Investment Company Act of 1940 (collectively, "funds").

The Chamber believes the proposal requiring mutual funds to have an independent chairman of the board would be harmful to mutual fund shareholders. We believe the question of the desirability of an independent chairman should be judged on the merits by a fund's board of directors. In the case of mutual fund companies, supermajorities of the directors are independent. While some boards may choose to separate the roles of chairman and CEO, we believe that a one-size-fits-all approach as contemplated by the Commission in its proposed rule will have negative, if unintended, consequences.

To be an effective chairman, a person must be intimately familiar with the operations of a company. Oftentimes, a management representative is in the best position to carry out the responsibilities of a chairman. Forcing a mutual fund to utilize a chairman not familiar with the operations of a company could severely impact its progress and success. Additionally, the combination of regulatory mandates and industry corporate governance best practices make an independent chair unnecessary.

We appreciate the opportunity to comment on the proposed rule and thank the Commission for considering our views.


R. Bruce Josten

cc: Hon. William H. Donaldson, Chairman, U.S. Securities and Exchange Commission
Hon. Paul S. Atkins, Commissioner
Hon. Roel C. Campos, Commissioner
Hon. Cynthia A. Glassman, Commissioner
Hon. Harvey J. Goldschmid, Commissioner
Mr. Paul F. Roye, Director, Division of Investment Management