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ICI Urges Court to Uphold Maryland Law

The Maryland Court of Appeals should uphold the constitutionality of a state law on mutual fund directors, according to mutual fund firms and fund and securities industry trade groups.

The Investment Company Institute and others have asked the appeals court to leave untouched a law that provides that mutual fund directors do not lose their independence by virtue of serving on multiple fund boards in the same mutual fund complex. The law helps preserve a system that is crucial to the mutual fund industry, the ICI, T. Rowe Price Associates of Baltimore, Md. and others argued in a 19-page friend-of-the-court brief filed Feb. 8.

Two mutual fund shareholders are challenging the 1998 law as unconstitutional. The appeals court is scheduled to hear arguments in the case March 2.