Democratic Senate Banking Committee Chairman Christopher Dodd warned this morning that he will consider legislation to resolve the question of proxy access if the Securities and Exchange Commission fails to adopt a rule on director nominations.

"This is one area where I might express interest legislatively" if the commission cannot come to a decision,” Dodd said at a July 31 committee hearing at which SEC Chairman Christopher Cox testified on the state of the securities markets. "My hope is that the commission will be able to resolve this."

Cox, a former Republican Congressman from southern California, was questioned by Dodd on the likelihood that investors would be able to file a proposal calling for access, given the threshold of 5 percent could keep "even large institutional investors such as Calpers" from filing.

Cox defended the threshold, noting it aligns with the commission’s existing 13D/G regime, which requires investors to disclose holdings above the 5 percent level and whether or not they intend to exert control.

Cox also noted that groups could pool holdings to meet the threshold and questioned whether a group unable to meet the 5 percent requirement could muster 50 percent support to pass an access bylaw.

Echoing past assurances, Cox told committee members that the issue of access would be resolved, one way or another, within months. "There will be a rule in place this fall … so [investors filing proposals for the 2008 proxy season] will know how to conform their conduct to the law," Cox said.

The proposed rules are now available via the commission’s Web site.

More on this story will follow in Friday’s edition of Governance Weekly.