SEC Extends Mystery Rule With Zero Details Provided
Published Date: 12/11/2025
Notice
Summary
The SEC is asking for comments on extending a rule that lets investment funds skip a shareholder vote when picking their independent auditor—if they have an independent audit committee instead. Boards just need to adopt and keep an audit committee charter, which takes about 2.75 hours one time. This keeps things smooth and saves time without extra yearly paperwork or costs.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 2 costs, 0 mixed.
One-Time Legal Cost For New Funds
When new funds adopt an audit committee charter to rely on Rule 32a-4, Commission staff estimates one-time outside legal costs averaging $2,086 per fund; with an estimated 88 new funds per year, the staff estimates an annual aggregate cost of approximately $183,568.
Funds Can Skip Auditor Vote
If a registered investment fund has an audit committee made up entirely of independent directors, Rule 32a-4 lets the fund skip submitting the selection of its independent public accountant to a shareholder ratification vote and rely on the audit committee instead.
One-Time Time Burden To Adopt Charter
To rely on Rule 32a-4, a fund's board must adopt and permanently preserve an audit committee charter; Commission staff estimates a one-time time burden of 2.75 hours per fund (15 minutes per director for a 9-director board = 2.25 director hours, plus 0.5 hours of paralegal time) and no annual hourly burden for preservation.
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