Appeals Court Hears Arguments Over Broker Exemption

Law360, New York (October 5, 2006, 12:00 AM EDT) -- The debate over whether broker-dealers providing investment advice through fee-based accounts should go unregulated played out in court yesterday, as the U.S. Court of Appeals for the District of Columbia Circuit heard arguments both for and against the U.S. Security and Exchange Commission’s controversial rule.

The SEC has exempted brokers with fee-based accounts from registering as investment advisers as long as the advice they provide to the accounts is “solely incidental” to their trading activity.

The exemption prompted the Financial Planning Association, a membership organization for...
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