Update on SEC Soft Dollar Task Force
Last week, representatives of Investorside Research Association met with SEC Chairman William Donaldson and the other Commissioners. The topic: a recent Investorside study finding that 95 percent of independent research providers had been affected by a "dramatic chill" as advisers reduce their soft dollar purchases of third-party research due to uncertainty surrounding the outcome of the SECís soft dollar task force study.
IM Insight spoke to Investorside chairman John Eade, who attended several of the meetings. According to Eade, who also serves as president of Argus Research, the SECís soft dollar task force is planning to deliver its recommendations to Chairman Donaldson by year-end. He said that during the meetings, SEC officials questioned the notion that advisers are reluctant to pay hard dollars for research that is currently softed. The question came up "more than three or four times," said Eade. He added, however, that the SEC folks emphasized that "just because we ask these questions doesnít mean weíre going in that direction."
Good news for fans of independent research: Eade said that the SEC officials gave no indication that they intended to distinguish between independent and proprietary research, as had been suggested by the ICI back in December 2003.