Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Tuesday, April 10, 2007

SIFMA Wants SEC to Request Re-Hearing of Fee-Based Accounts Decision

The Securities Industry and Financial Markets Association (SIFMA) today announced that it is urging the Securities and Exchange Commission to ask the D.C. Court of Appeals for a rehearing on the issue of fee-based brokerage accounts.  Late last month, the court ruled in favor of the Financial Planning Association (FPA) in its case against the Securities and Exchange Commission, finding the SEC exceeded its statutory authority under Section 202(a)(11)(F) of the Investment Advisers Act of 1940 when it  adopted Rule 202(a) (11)-1, which exempted broker-dealers offering fee-based brokerage accounts from registering as advisers.

“This ruling has the potential to significantly impair an important element of consumer choice for American investors and we strongly urge the SEC to ask for a rehearing.  With this decision, one million investors, with nearly $300 billion in assets, could see a significant reduction in their range of choices and options for receiving and paying for financial services.  Investors deserve no less than robust choice and vigorous competition,” said Marc Lackritz, President and CEO of SIFMA.

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