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Breaking News

June 4, 2007

ACA Insight Breaking News - IM Insight Breaking News – FPA Doesn’t Object to Extension of Time For Brokerage Industry

The Financial Planning Association has agreed with the SEC that the brokerage industry should be provided with additional time to adjust to the absence of the fee-based brokerage rule, which was struck down in the court’s March 30 ruling in FPA v. SEC.

In its June 1 response to the SEC’s motion for a stay, the FPA asked the U.S. Court of Appeals for the D.C. Circuit to grant the SEC’s petition for an additional four-month extension of time, until October 1, 2007. “The FPA appreciates that brokerages cannot instantaneously come into compliance with the Court’s ruling in this case and understands the logic for affording brokerages this period to make necessary changes,” said the group.

However, the FPA asked the court not to provide additional extensions of time. “As a practical matter, deadlines focus the mind,” said the group. “Brokerages faced with a date to meet to bring themselves into compliance can be expected to dedicate the efforts necessary to meet that date. Brokerages told that there is a present date, with the implication that, if enough problems develop, the date may be extended, have a very different incentive.” The court, said the FPA, "should be extremely cautious about making the four months a first installment on delays in coming into compliance with the law." Absent "truly extraordinary and unexpected circumstances," added the group, the four-month stay should be "the last.”

- IM Insight