* Congress gets draft bill to increase SEC powers

* SEC could ban compensation tied to inappropriate sales

* SEC would create fund to pay whistleblowers (Adds comments from Treasury official, SEC and trade group)

By David Lawder

WASHINGTON, July 10 (Reuters) - The Obama administration wants to give the U.S. Securities and Exchange Commission broad powers to identify and ban compensation practices at investment brokers and advisers that interfere with their fiduciary duties to clients.

The plan was contained in a legislative proposal to boost the SEC's investor protection authority to put them on a par with those of a proposed new consumer financial protection agency.

Under the plan, the SEC could decide to ban bonuses or special "side payments" to brokers and advisers for steering clients into products that may be profitable for the sellers, but inappropriate for the investor.

"It provides the SEC with a tool that it needs to ensure that such side payments or sales practices or conflicts of interest do not, in fact, interfere with investor interests," said Michael Barr, the U.S. Treasury's assistant secretary for financial institutions.