|For Immediate Release
|April 3, 2006
Interest on Free Credit Balances Available to Wisconsin
(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.