E*TRADE (ETFC) got a major boost earlier this week on news that the company had received regulatory approval to distribute $100 million in cash from its bank to the parent company. This move was widely cheered by analysts and investors as it marks a big step in the company’s plans to improve its balance sheet.

E*TRADE CFO Matthew Audette said on Wednesday, “Today’s announcement refelects E*TRADE’s significant progress on our capital plan, including de-risking and de-leveraging the balance sheet, bolstering our risk management capabilities, and strengthening the Company’s overall financial position.” He went on to say that E*TRADE intends to ask for subsequent $100 million per quarter distributions over the next few quarters.

Some analysts believe if the company is able to get regulatory approval for future quarterly distributions, E*TRADE could retire up to $500 million of its 6% notes before they come due in November 2014. Wells Fargo analysts believe that this could add approximately 6 cents per-share to E*TRADE’s bottom line.

Not surprisingly, investors were extremely encouraged by this news. E*TRADE shares rose more than 8 percent in Wednesday’s trading. That 8 percent gain was the biggest single-day gain in more than two years. The stock hit a new two-year high right after this news was released.

For more information click here for the full press release.