The Securities and Exchange Commission is considering an exemption from the Investment Advisers Act of 1940 for brokerage units that charge asset-based fees but exercise no discretionary authority in trading for their customers.

The rule, proposed Friday, would reflect a shift in brokerage firms' compensation practices. Merrill Lynch & Co., Morgan Stanley Dean Witter & Co., Prudential Securities, and PaineWebber Inc., among others, have announced plans to let customers trade on-line for asset-based fees. Under current rules, units offering such services must register as investment advisers.

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