(Reuters) - Merrill Lynch, Pierce, Fenner & Smith Inc. and Harvest Volatility Management LLC have agreed to pay a combined $9.3 million to settle U.S. Securities and Exchange Commission charges related to investment limits and fees.

According to the SEC, the firms exceeded clients' investment limits over a two-year period beginning in March 2016. Regulators said this led to clients paying higher fees, facing increased market exposure, and getting hit with investment losses.

The investment advisers sold a complex options trading strategy to clients but did not abide by basic client instructions, Mark Cave, Associate Director of the SEC's Enforcement Division, said in the SEC's statement.

Neither firm admitted nor denied the SEC's findings. Representatives for Merrill, which is part of Bank of America, and for Harvest Volatility did not respond immediately to requests for comment.

Harvest agreed to pay a penalty of $2 million and another $3.5 million in disgorgement and interest. Merrill agreed to pay $1 million and another $2.8 million in disgorgement and interest.

Harvest was the primary investment adviser and portfolio manager over an investment strategy that traded options in a volatility index. Starting in 2016, the adviser allowed some client accounts to exceed exposure levels the investors designated when they signed up for it, the SEC said.

Merrill introduced clients to Harvest in exchange for a portion of Harvest's management and incentive fees, SEC found. The firm was aware investors' exposure was exceeding the pre-set levels, regulators said.