Broker/dealers will be able to have their representatives collect asset-based fees rather than commissions without facing added regulation under a rule proposed by the SEC. If adopted, the new rule will allow registered reps to offer wrap accounts and some other products for which they receive a fee based on assets under management, without being subject to the Investment Advisers Act, the SEC said in a statement.

Under the existing rule, representatives who are paid based on assets under management must not receive compensation for providing advice. The proposed rule provides that a broker who does not have discretionary authority to trade in an asset-based account would, in most instances, be exempt from the Advisers Act, regardless of the reason for the fee.

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