BNY Securities Group, The Bank of New York’s institutional agency brokerage, clearing and financial services outsourcing group, has welcomed the statement by SEC Chairman Donaldson that his review of soft dollars would not distinguish between proprietary and third party research.
BNY says it sees the Donaldson statement as “very positive.” It adds that it “supports our position that third-party soft dollars will continue to be embraced by the regulators. This statement speaks to the importance of independent research to the investor. Additionally, it addresses the view that third-party research should not be treated differently from proprietary research.”
Donaldson explained on Thursday of last week that the internal SEC staff task force he established in the spring of this year to review soft dollar practices would make a distinction between in-house and third-party research in its recommendations about the future of softing. “The work of this task force is a high priority, and it is still formulating its recommendations,” he said. “No decisions have been made about changes to soft dollar practices. In approaching soft dollar issues, the task force has not distinguished between `proprietary’ research produced internally by a broker-dealer, and independent `third-party’ research. I believe that independent research can be a valuable resource for investors, as reflected in the Commission’s settlement in the analyst case. As I recently indicated in testimony before the Senate Banking Committee, it would be a mistake to inhibit the access of investors to third party research.”