November 20, 2003

Sacramento, CA – The California State Teachers’ Retirement System today sent a letter to the Securities and Exchange Commission criticizing the reform proposal for the New York Stock Exchange that was recently approved by NYSE members. The proposal is now facing review by the SEC, which has the power to ultimately ratify or reject it.

In a letter sent to Jonathan Katz, Secretary of the SEC, Jack Ehnes, CalSTRS chief executive officer, wrote of his disappointment in the proposal’s support of a two-tiered board structure and its failure to create a truly independent Board of Directors.

“This is not the proper message to send to investors in the midst of still more assaults on investor confidence arising from the specialist trading controversy and the mutual fund trading scandal,” Ehnes wrote.

“We urge the Commission to reject this proposal as inadequate for the monumental task at hand and incorporate the suggestions that institutional investors have been urging for a long time.”

The letter reiterated the heart of these suggestions, including:

• Separation of the Exchange’s regulatory function from the business function
• Strong representation of the public institutional investor community on the board
• Stronger efforts to set the standards for disclosure, openness and transparency
• Retention of the single-board structure

CalSTRS, with a $107 billion portfolio, is the nation’s third largest public pension fund. It administers retirement, disability and survivor benefits for California’s public school educators in grades kindergarten through community college, serving more than 715,000 members and benefit recipients. CalSTRS portfolio’s exposure to the New York Stock Exchange companies represents $34 billion, making it a major investment partner with the Exchange.

Please click here to see Mr. Ehnes’ letter.