RegAlert2003-10-31
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SEC Division of Investment Management staff letter: Merrill Lynch, Pierce, Fenner & Smith Incorporated
The SEC staff stated it would not recommend enforcement action under Section 206(4) of the Investment Advisers Act and Rule 206(4)-3 if a registered investment adviser pays cash solicitation fees to Merrill Lynch or its associated persons, despite a Final Judgment that otherwise would preclude such payments. This relief is conditioned on Merrill Lynch conducting arrangements in compliance with Rule 206(4)-3 terms, complying with the Final Judgment including payment of disgorgement and penalties, and disclosing the Final Judgment in writing to each solicited person at least 48 hours before contract entry or upon entry if a five-day termination right exists. The position applies only to the specific Final Judgment and does not address other potential disqualification bases under the Rule.
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Effective November 4, 2022, This Letter is Withdrawn. Please consult the following web page for more information: https://www.sec.gov/divisions/investment/im-modified-withdrawn-staff-statements .
Merrill Lynch, Pierce, Fenner & Smith Incorporated
October 31, 2003
RESPONSE OF THE OFFICE OF CHIEF COUNSEL
Merrill Lynch, Pierce, Fenner & Smith Incorporated
DIVISION OF INVESTMENT MANAGEMENT
File No. 8-7221
We would not recommend enforcement action to the Commission under Section 206(4) of the Investment Advisers Act of 1940 ("Advisers Act") and Rule 206(4)-3 thereunder if any investment adviser that is required to be registered pursuant to Section 203 of the Advisers Act pays to Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), a registered broker-dealer and investment adviser, or any of Merrill Lynch's associated persons, as defined in Section 202(a)(17) of the Advisers Act, a cash fee, directly or indirectly, for the solicitation of advisory clients in accordance with Rule 206(4)-3, 1 notwithstanding a judgment of injunction from the United States District Court for the Southern District of New York (the "Final Judgment") that otherwise would preclude such an investment adviser from paying Merrill Lynch a solicitation fee. 2
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