By unanimous vote, the Securities and Exchange Commission voted Wednesday to approve new guidelines on soft dollar deals, reported Reuters. First made public last October, the clarified rules will take effect in six months.

The newly green-lighted interpretation of "safe harbor" as granted under Section 28(e) of the 1934 Act upholds the Section's provision that companies may pay more than the lowest available commission in order to avail of brokerage and research services. But it limits the services that can be paid for with soft dollars to actual execution and research, defining "research" strictly as "advice," "analysis," and "reports." Broker-dealers receiving soft dollars from money managers must either execute, clear, or settle the trades in question, or perform certain specified functions like monitoring trades and settlements or maintaining records.

The Investment Company Institute gave a thumbs up to the SEC's vote in a statement issued by institute president Paul Schott Stevens on Wednesday, but some fund firms have already decided soft dollar arrangements are more trouble than they're worth.  

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