Christopher Cox, Chairman of the Securities and Exchange Commission (SEC) provided opening remarks to the Practicing Law Institute's recent conference, and while his comments were primarily focused on how technology has revolutionized the financial markets many times over, and is being utilized to level the playing field for tens of millions of average investors, a significantly understated aspect of his speech related to his ending comments.

It was noted by Commissioner Cox that the study was required due to the fact that over the past few decades the distinctions between investment advisers and broker-dealers have become increasingly blurred due to changes in the industry, in the law, and in the marketplace. Ultimately, the IA/BD rule was promulgated to address some of the inherent confusion between the two investment platforms. Under the BD/IA rule, a broker/dealer can now charge an asset-based or fixed fee for its services, and is exempt from the Advisers Act, so long as the advice is incidental to the brokerage services, and certain disclosures are made. Additionally, the IA/BD rule attempted to provide guidance about the sort of advice that will not be considered solely incidental to brokerage, including financial planning and exercising investment discretion.

It is speculated that the primary focus of the study will be to compare the various levels of protection which retail customers of financial services are afforded under the Securities Act and the Investment Adviser Act of 1940, and to address the investor protection issues arising from material differences between the two regulatory platforms. Commissioner Cox concluded his comments on the study by stating that an announcement will be made in the near future about how exactly the study will be conducted, and when the study will be commenced.