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SEC To Consider Bank and Adviser Exemptive Rules

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  • Baker, John
    The Securities and Exchange Commission has announced that it will consider exemptive rules applicable to banks and to investment advisers that are also
    Message 1 of 1 , Sep 13, 2007
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      The Securities and Exchange Commission has announced that it will consider exemptive rules applicable to banks and to investment advisers that are also registered broker-dealers at an open meeting scheduled for Wednesday, September 19, 2007, at 10 am. The investment adviser rules are in reaction to the court decision in Financial Planning Association v. SEC, which struck down Rule 202(a)(11)-1 under the Investment Advisers Act of 1940; the struck-down rule generally provided that a broker-dealer would not be deemed to be an investment adviser based solely on its receipt of special compensation for advisory services, if certain requirements were met. The court's decision will take effect on October 1, 2007. The SEC is considering adoption of a temporary rule that would provide investment advisers who also are registered broker-dealers an alternative means of compliance with the principal trading restrictions of Section 206(3) of the Advisers Act, as well as the proposal of an interpretive rule to clarify the application of the Advisers Act to certain broker-dealer activities. The Securities Industry and Financial Markets Association (SIFMA) has posted an outline of the relief it expects the SEC staff to propose at

      http://www.sifma.org/regulatory/feebased/pdf/tradingrelief-outline.pdf

      For my most recent post on the court's decision, see

      http://groups.yahoo.com/group/FundLaw/message/1126

      The SEC also will consider adoption, jointly with the Board of Governors of the Federal Reserve System, of new rules under the Securities Exchange Act of 1934 to implement the Gramm-Leach-Bliley Act bank exceptions to the definition of "broker." These rules were most recently proposed in December 2006 as Regulation R. The SEC will also consider whether to adopt additional related rules and rule amendments, including rules exempting banks from the definition of "dealer" under the Exchange Act. For my post on the proposal of Regulation R, see

      http://groups.yahoo.com/group/FundLaw/message/1112

      The SEC's meeting notice is available at

      http://www.sec.gov/news/openmeetings/2007/ssamtg091907.htm


      John M. Baker <JMB@...>
      Stradley Ronon Stevens & Young, LLP http://www.stradley.com
      1220 19th Street NW, Suite 600
      Washington DC 20036
      202.419.8413
      202.822.0140 fax
      FundLaw Listowner http://groups.yahoo.com/group/fundlaw
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