SEC helps move from fee-based accounts

The SEC has voted to give some non-discretionary advisory accounts limited relief from principal trading restrictions.
SEP 20, 2007
By  Bloomberg
The Securities and Exchange Commission yesterday voted to provide certain non-discretionary advisory accounts with limited relief from principal trading restrictions. A principal trade is an order a broker-dealer executes for its own account and at its own risk, rather than carrying out transactions for its clients. Fee-based brokerage accounts are on their way out, thanks to the overturned exemption rule, but some of their characteristics will remain in fee-based advisory accounts. Now, these firms will have to provide written notice and obtain blanket consent from these clients before relying on the rule. They must also notify investors in writing that the firm may engage in principal trading and describe possible conflicts of interest, as well as the way it will address those problems. Principal trades that do not involve a security that’s issued by the dually registered firm or a transaction in which that firm is an underwriter — aside from offerings involving investment-grade debt securities — are eligible for relief. SIFMA, the securities trade group, applauded the rule. “This decision provides important flexibility to these consumers and delivers increased consumer choice within the constraints set by the court,” said Marc Lackritz, president and CEO of SIFMA. This rule will have a 24-month sunset provision.

Latest News

US wholesale inflation surprises on food, energy prices
US wholesale inflation surprises on food, energy prices

The latest PPI print, clocking in north of 3 percent, adds to concerns that inflation is far from tamed.

Robinhood earnings surge as TradePMR acquisition plan rolls along
Robinhood earnings surge as TradePMR acquisition plan rolls along

The DIY investment giant's positive earnings surprise, surpassing $1 billion in revenue for the first time, puts it on strong footing for future expansion.

Advisors expect revenue boost this year as Secure 2.0 provisions kick in
Advisors expect revenue boost this year as Secure 2.0 provisions kick in

Most retirement plan specialists anticipate gain of up to 10%.

Debt has become a way of life for working Americans, report warns
Debt has become a way of life for working Americans, report warns

And they would have to work extra hard to pay it off.

Stock fragility near record levels, stirring memories of dot-com bubble
Stock fragility near record levels, stirring memories of dot-com bubble

BofA strategists highlight rising volatility's risk to largest US stocks.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.