The Securities and Exchange Commission voted 5-0 today to adopt a new rule that would ban mutual fund companies from directing business to brokers as a reward for selling fund shares to investors.

Under the amendments, investment companies will be prohibited from paying for the distribution of their shares with brokerage commissions.

The move is being applauded by the brokerage industry trade association, the Securities Industry Association. It says that the new rule will help to eliminate potential conflicts of interest in mutual-fund sales.

The SIA also applauded the commission for clarifying that the rule is not intended to prohibit directing transactions to broker-dealers that distribute fund shares where funds have policies and procedures designed to insure that the transactions are consistent with best execution obligations, and not tied to the level of fund sales.

“In our comment letter on the proposed rule, we supported banning a quid pro quo arrangement between brokers and fund companies on the basis of sales of a particular fund, but cautioned against an overly broad ban that could deny investors the advantages of best execution and offer them only a limited choice of funds,” said Marc Lackritz, SIA president. “The SEC took into account those concerns in its final rule.”