Press Releases

For Immediate Release
April 3, 2006

Interest on Free Credit Balances Available to Wisconsin Investors

(Madison) Investors have become accustomed to earning income on uninvested cash in their brokerage accounts, either via money market funds or interest payments made directly to their account by the broker-dealer. Until recently, however, the definition of “banking” under Wisconsin’s banking laws created several hurdles for broker-dealers to surmount before direct interest payments could be made to Wisconsin investors’ accounts. As a result, few if any broker-dealers offered this option in Wisconsin.

The recent passage of 2005 Wisconsin Act 158 has changed the definition of “banking” in s. 224.02, Wis. Stats., to exclude the payment of interest left with a broker-dealer pending investment in securities from this definition. This new treat becomes effective on April 5, 2006 and will allow broker-dealers to calculate and pay interest on uninvested funds in Wisconsin investor accounts in the same manner it does for investors residing in other states.

The Division of Securities worked closely with and commends the Division of Banking for its efforts to address this issue and to simplify treatment of broker-dealer interest payments.

Link to s. 224.02 revision.