No Hard Line on Soft-Dollar Trading Deals

On Wednesday the SEC commended Lehman for its unbundling practices, and said that the regulators would consider pushing unbundling for all firms. The SEC's job is to provide clarity for the markets, the SEC said, and the Fidelity/Lehman partnership provides clarity for their clients.

Still, some insiders are wondering if unbundling is really good for Wall Street.

"The SEC is attempting to make this a more healthy marketplace, and they believe they are being amenable to third-party providers," Easthope says. "But this ruling is still just amenable to order flow."

Smaller research shops will suffer, says Easthope.

In fact two firms, Thomas Weisel(TWPG) and Cowen, recently said unbundling practices were a significant risk to their business. Other insiders are also concerned that Lehman's plans to cut research can lead to so-called "selective disclosure," or giving certain high-paying clients information while withholding the information from others.

But while Wall Street's researchers lose sleep over the best way to charge for their services, the SEC remains a bystander.

"It had been a while since anyone heard from the SEC about this topic, so it's good to get something," says Easthope. "But the 5-0 ruling also proves that it's not very controversial."

>To order reprints of this article, click here: Reprints