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News October 4, 2004 Issue

More on the SEC’s Soft Dollar Task Force . . .

The topic of soft dollars is a "very high priority" for the Commission, according to SEC Division of Investment Management associate director Susan Nash. In a speech last week at a U.K. Financial Services Authority conference, Nash noted that "the area of soft dollars is complex" and that the SECís Soft Dollar Task Force "is considering a variety of approaches." Three options under consideration, according to Nash:

  • narrowing the definition of "research" that qualifies under Section 28(e) so that only research that has "valid, intellectual content" would qualify;
  • requiring the costs of research and execution to be quantified, or making the cost of research more transparent through other means; and
  • enhancing books and records requirements to facilitate the SECís "ability to police this area."

Notably, while Nash described the Task Forceís role as considering a range of options, she did not indicate that the Task Force itself would endorse a particular approach. The goal of the Task Force, she said, "is to fully understand how soft dollars are used and the pros and cons of various alternative reform approaches."