Now that you’ve seen what ACA Insight has to offer, don’t be without it. Subscribe now!

The weekly news source for investment management legal and compliance professionals

Current subscribers - please log in to the website in the upper right-hand corner

News July 11, 2005 Issue

SEC Staff's IA-BD Report Recommendations Due This Week

But will we get to see them?

The SEC had no comment last week on whether the staff’s recommendations to the Commission on the scope of a IA-BD report, as requested in the fee-based brokerage adopting release, will be made public.

The key issue, of course, is whether there will be a study, and if so, who will be doing it. The Financial Planning Association and the Investment Adviser Association each have asked the SEC not to hand the project over to the NASD.

In a June 22 letter, the IAA said that it felt "very strongly" that the SEC should seek persons with knowledge of applicable law, who have a balanced perspective, and do not have a personal interest in a particular regulatory outcome. The NASD, it said, "clearly would not constitute an impartial third party," citing recent NASD comments that adviser regulation does not provide as much consumer protection as broker regulations.

More generally, the IAA urged the SEC to devote adequate resources to ensure that broker-dealers comply fully with the requirements of the recently-adopted fee-based brokerage rule, particularly "during the rule’s initial implementation period." The group also asked the SEC to play a "much more proactive role" in educating consumers about the differences between advisers and brokers.