At the Bell

CitiStreet to offer 401(k) advice

CitiStreet Advisors LLC of Quincy, Mass., is announcing today that it will be the second company to take advantage of the Department of Labor’s SunAmerica decision allowing managers of defined-contribution retirement plans to offer investment advice.

The department’s opinion in December allowed SunAmerica Retirement Markets Inc. in Los Angeles to set up advisory services for its 401(k) plans using Ibbotson Associates of Chicago, an independent third-party adviser. CitiStreet is entering into a similar partnership with Financial Engines Inc. of Palo Alto, Calif., which provides online advice for 401(k) participants.

E*TRADE zeroing in on trading outfits

E*TRADE Group Inc. in Menlo Park, Calif., closed its deal last week to buy Tradescape Corp., a New York online professional trading company, and it says more acquisitions are on the way.

Jarrett Lilien, president of E*TRADE Securities Inc., the company’s brokerage unit, says he plans one to two more acquisitions in professional trading in the next six to 12 months. Professional traders are a step above active traders, making anywhere from several hundred to 1,000 trades a day.

An industry analyst says possible E*TRADE targets include MB Trading in El Segundo, Calif., Terra Nova Trading LLC in Chicago and Sonic Trading Management LLC in New York.

Outside managers for Citigroup MDA

Citigroup Asset Management in Stamford, Conn., has a plan in the works to bring outside money managers into its proprietary Multi-Discipline Account, a separately managed account product.

Peter Cieszko, a managing director who heads retail and high-net-worth distribution at Citigroup, said during an interview last week that the company will be announcing later this year an MDA lineup that matches “affiliated with non-affiliated money managers.”

With more than $70 billion in separately managed accounts, Citigroup is by far the industry’s dominant player. The MDA product, which packages multiple investment strategies in a single portfolio with a minimum requirement of $100,000, has taken the industry by storm over the past 18 months.

NASD reorganizes

The National Association of Securities Dealers Inc. announced Friday a new organizational structure for handling its regulatory functions, which will be the sole role of the NASD after its planned separation of The Nasdaq Stock Market Inc. and The American Stock Exchange LLC.

The new organization will have a division for regulatory policy and oversight, and a division for dispute resolution.

The new regulatory-policy unit will be headed by Mary Schapiro, former president of NASD Regulation Inc., who also has been named NASD vice chairman.

FPA asks tougher rule for Internet

The Financial Planning Association wants securities regulators to toughen a proposed rule to exempt Internet-based financial advisers from state registration.

In a comment letter filed last week with the Securities and Exchange Commission, the FPA asked that the exemption apply only to advisers who deliver all their business online.

As proposed, the rule would allow the exemption if at least 90% of the adviser’s business were Internet-based. A qualifying adviser would then need only register with the SEC.

The Investment Counsel Association of America in Washington said it approves of the 90% threshold as long as only paying customers count.

The SEC proposed the rule in April. The deadline for comments was Thursday.

Correction

* An article about hedge fund fraud in last week’s issue incorrectly reported the amount that David Mobley, adviser to the Maricopa Investment Fund Ltd. and other Maricopa hedge funds, was charged with bilking from investors. The correct amount is $59 million.