Some financial advisers and state regulators are concerned that the Securities and Exchange Commission is considering expanding the recently adopted principal-trade rule to cover advisory firms that are affiliated with brokers. Michael Udoff, associate general counsel for SIFMA, said expanding the rule to include advisory firms was a wise move. "There are some smaller broker-dealers that may not be dually registered," Udoff said. In that case, he said, the cost of hiring a chief compliance officer and registering brokers may be a burden.

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