ICI Reiterates Support for Broker-Dealer Regulation ProposalWashington, DC, September 22, 2004 - The Institute supports an SEC proposal that would exclude from regulation broker-dealers that provide investment advice, but urges the SEC to require continued oversight of broker-dealers' use of fee-based accounts. Background
Changes to Rule 202(a)(11)-1 of the Investment Advisers Act of 1940, originally proposed in 1999, would exclude a broker-dealer providing investment advice from regulation under the Advisers Act if: - the advice is provided on a non-discretionary basis;
- the advice is solely incidental to its brokerage services; and
- the broker-dealer discloses to its customers that its accounts are brokerage accounts.
ICI Position
In its recent comment letter, the Institute reiterates support for an SEC proposal from 2000 and recommended the SEC study some of the broader issues raised by the proposal. The Institute also notes that, while the proposal is pending, broker-dealers have been able to rely on relief similar to that provided in the proposed rule and NASD has monitored broker-dealers' use of brokerage accounts. ICI urged the SEC to encourage NASD to remain diligent in overseeing the use of these accounts by broker-dealers, according to the Institute's letter. Related Links
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