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CalPers Comes Out Against Big Board

The nation's largest public pension funds says proposed reforms aren't enough.

The nation's largest public pension fund rejected the proposed overhaul of the

New York Stock Exchange

board, saying it is short on reform and won't incease investors' confidence.

The California Public Employees' Retirement System sent letters to commissioners of the

Securities and Exchange Commission

with a three-part critique of interim Big Board head John Reed's proposed plan for the board. CalPers, a $154 billion fund whose opposition was key to the ouster of former NYSE Chairman Dick Grasso, had these objections:

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That investors' were inadequately represented on the board.

That the regulatory structure isn't independent enough;

That the proposed structure of the board and advisory board will be complex to the point of inefficiency.

CalPers said it would ask the SEC to reject Reed's proposal and ask other pension funds to make similar pleas.

Reed has proposed a smaller board of directors for the Big Board, reducing the current 27-member panel to eight former corporate executives and Wall Street outsiders. The new board also would appoint a 20-member advisory panel, made up primarily of securities industry representatives.

Sean Harrigan, president of the CalPers Board of Administration, said Reed's plan doesn't go far enough. He said the proposed two-board structure is "nothing more than shuffling the deck chairs" and called on one-third of the seats on Reed's proposed "main board" to be made up of investors.