Alert January 08, 2008

SEC Publishes Rand Broker-Dealer/Investment Adviser Report

The SEC made available the report it commissioned from the Rand Corporation to examine (a) investment advisers’ and broker-dealers’ practices in marketing and providing financial products and services to individual investors, and (b) investors’ understanding of the differences between investment advisers’ and broker-dealers’ financial products and services, duties and obligations.  The SEC began the process of commissioning the report in connection with its 2005 adoption of rule amendments addressing the application of the Investment Advisers Act  to broker-dealers offering certain types of brokerage programs.  Following a March 2007 decision of the Court of Appeals for the D.C. Circuit that overturned that rulemaking (as discussed in the April 10, 2007 Alert), the SEC accelerated the report’s delivery date to December 31, 2007, three months earlier than originally scheduled.  The SEC has indicated that it expects the report to inform its ongoing consideration of the appropriate regulatory regimes for the broker-dealer and adviser industries.