SEC Asks Court for Stay on Overturned Merrill Rule

Although the ruling in Financial Planning Association v. SEC was set to go into effect today, the Securities and Exchange Commission (SEC) has filed a stay, asking for more time to transition fee-based brokerage accounts into other account types.
The SEC last week asked for a 120-day stay of the ruling, in which the U.S. Court of Appeals for the District of Columbia Circuit said that the Commission had overstepped its bounds by giving brokerage firms an exemption from the Investment Advisers Act of 1940 (See SEC “Merrill Lynch Rule’ Governing Advice Struck Down).
More time is needed for investors to make informed decisions about whether they are affected by this decision and what they should do with their assets, according to the Commission.
The SEC asked for the stay after deciding not to ask for a review of the March 30 ruling (See SEC Won’t Challenge Broker Registration Ruling), which it says affects an estimated one million fee-based brokerage accounts holding an estimated $300 billion.