Given that the Financial Planning Association has until June 4 to file a response to the SEC’s request that the U.S. Court of Appeals for the D.C. Circuit give broker/dealers four months to convert their fee-based accounts, the FPA is now weighing its options, says Merril Hirsh, a partner at Ross, Dixon & Bell in Washington, and the lawyer representing the FPA in the suit that successfully challenged the SEC’s so-called Merrill Lynch rule.

The FPA basically has three choices, Hirsh says: not to oppose the SEC’s motion, oppose the motion in its entirety, or oppose it in part. While not divulging which way the FPA will go, Hirsh says the FPA “is anxious to have the rule implemented as quickly as possible,” adding that the FPA is now mulling “whether the rule should be implemented instantaneously or whether there should be some transition time and, if so, how that should be handled by the court.”

The Court’s decision on March 30 exempted brokers from being subject to regulation as investment advisors in fee-based brokerage accounts, on the basis that the SEC had exceeded its authority under the Investment Advisers Act of 1940. The SEC announced May 14 that it will ask the court to allow a 120-day stay of the Appeals court’s ruling so that investors and their brokers could respond. The Commission estimates that one million fee-based brokerage accounts are affected by the ruling. The SEC’s deadline to appeal the decision has passed, and the Commission has stated publicly that it will not appeal the decision to the Supreme Court.

SIFMA, the trade group representing B/Ds, has already argued that four months isn’t enough time. But Hirsh says the “FPA’s view is that [converting the fee-based accounts] should not take more than four months,” and the less time B/Ds are given the better because “deadlines focus the mind.” He adds: “The court ruled that what currently exists is illegal. So it’s really a question of how long do we allow something that we know is illegal to take place while we get it right.” Industry observers say SIFMA will now push Congress to rewrite the Investment Advisers Act of 1940 to permit fee-based accounts.