Document ID: SEC-2006-0309-0001
Agency: sec
Document Type: Notice
Title: Securities Exchange Act and Investment Advisers Act: Broker-dealer/investment adviser study
Posted Date: 2006-03-09T05:00Z

[Federal Register: March 9, 2006 (Volume 71, Number 46)]
[Notices]               
[Page 12224]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09mr06-106]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release Nos. 34-53406; IA-2492]

 
Notice of Broker-Dealer/Investment Adviser Study

    On March 3, 2006, Chairman Christopher Cox announced that a study 
will be commenced to compare the levels of protection afforded retail 
customers of financial service providers under the Securities Exchange 
Act and the Investment Advisers Act and to address any investor 
protection concerns arising from material differences between the two 
regulatory regimes.
    This study is part of the Commission's ``commit[ment] to pursuing 
the most effective solutions to * * * vital issues'' \1\ raised in the 
course of the promulgation in April 2005 of Rule 202(a)(11)-1 (the 
``IA/BD rule''). Certain Broker-Dealers Deemed Not To Be Investment 
Advisers, Investment Advisers Act Release No. 2376 (Apr. 12, 2005), 70 
FR 20424 (Apr. 19, 2005). The IA/BD rule provides an exception from the 
Investment Advisers Act for broker-dealers receiving compensation other 
than commissions--such as fees that are fixed dollar amounts--for full-
service brokerage programs that include advice about securities. Under 
the rule, when a broker-dealer charges an asset-based or fixed fee, it 
is excepted from the Advisers Act so long as its advice is solely 
incidental to brokerage and it makes certain disclosures. The rule also 
provides guidance about the sort of advice that will not be considered 
solely incidental to brokerage--such as when a broker-dealer exercises 
investment discretion over an account.
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    \1\ Certain Broker-Dealers Deemed Not To Be Investment Advisers, 
Investment Advisers Act Release No. 2376 (Apr. 12, 2005), 70 FR 
20424, 20442 (Apr. 19, 2005).
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    The IA/BD rule was the subject of a large number of comments, but, 
as the Commission noted in the release adopting the rule, many of the 
concerns voiced by commenters went ``well beyond the scope of the 
rulemaking'' \2\ and implicated matters that might ``more appropriately 
fall under broker-dealer regulation.'' \3\ Accordingly, the staff was 
directed to report on recommendations for a study to look into these 
issues.\4\ After considering the staff's recommendations and consulting 
with the other Commissioners, Chairman Cox determined that a study will 
be conducted to address the issues specified in the IA/BD release.
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    \2\ Id. at 20442.
    \3\ Id. at 20424.
    \4\ Id. at 20442.

    Dated: March 3, 2006.
Nancy M. Morris,
Secretary.
 [FR Doc. E6-3332 Filed 3-8-06; 8:45 am]

BILLING CODE 8010-01-P