Broker-dealer registration and ERISA investment managers

P/OPINION 76-20

3(38)(B)

March 30, 1976

Dear          :

This is in response to your letter of December 1, 1975,
regarding the Employee Retirement Income Security Act of
1974 (ERISA).

Specifically, you request a ruling that the term "investment
manager" under ERISA section 3(38) (B) includes a broker
or dealer registered under the Securities and Exchange Act of
1934. You support your request with statements upon which
you conclude as follows:

             . . . a broker-dealer registered under the
             Exchange Act comes under much more intensive
             surveillance than a person registered under
             the Advisers Act. A violation of any of the
             provisions of the Advisers Act (whether or
             not a person is registered under the Advisers
             Act) is a violation of the Exchange Act. The
             Exchange Act, by its terms and by interpretation,
             in effect encompasses all of the provisions of
             the Advisers Act.

Upon consideration of the arguments presented in your letter,
I see no reason to modify the position taken in FR-6 of
ERISA Interpretive Bulletin 75-5 (29CFR 2509.75.5). The
provision in ERISA section 3(38)(B)(i) is clear on its
face in requiring registration under the Investment
Advisers Act of 1940. Also, the Securities and Exchange
Act of 1934 does not encompass in effect all of the
provisions of the Advisers Act. For instance, registration
under the 1934 Act does not subject a person to the same
regulation of fees provided under the Advisers Act. Further,
there is always the possibility that regulation under the
Advisers Act may be extended in the future to new matters
not covered by the other statute.

Your understanding of our position will be appreciated.

Sincerely,