Broker-dealers got the breathing room they hoped for on Monday with regards to complying with the recent court ruling that outlaws fee-based brokerage accounts. A federal court granted an SEC-requested 120 day stay, until October 1st, for firms to do away with their fee-based brokerage accounts per a federal court ruling on March 30th banning the accounts. (Read Registered Rep.’sMay cover story about the pain of the new reality.)

Firms like Merrill Lynch and Morgan Stanley and other wirehouse firms manage the bulk of the approximately $300 billion in client assets in these accounts. The March ruling deemed the accounts were inappropriately classified as “brokerage” accounts since they charged a continuous fee. Since then firms have probably been trying to decide whether to begin shifting the assets to the registered investment advisory side of the business or changing the compensation arrangement on the accounts back to commissions. Or whether they will attempt to challenge the ruling.

Attorneys and company executives have called this shifting of assets from one side of the business to the other, known as “repapering,” an administrative nightmare, not only for the firms’ back-office staff but brokers who may face angry clients and lots of questions. The stay gives firms like Merrill, Morgan Stanley and others much needed time to adjust—or, if they choose, to respond to the ruling—and their brokers time to explain.