|  | | 2004 News and Press Releases | | |
HEADLINE NEWS:
SEC Leaves Bank-Broker Regulation Hanging Again
Staff Writer
Bank Investment Consultant. December 15, 2004
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EXCERPT: The Securities and Exchange Commission has again delayed its decision on a controversial regulation that would define banks as broker-dealers, putting them under its watch. The decision has been pushed back to March 31, pending additional comments on Regulation B. The SEC missed its previous Nov. 5 deadline amid unprecedented pressure from other regulators, which were concerned that the move would interfere with banks' investment operations. In a joint letter sent to the SEC on Oct. 8, the Federal Reserve Board, Federal Deposit Insurance Corp., and the Office of the Comptroller of the Currency told the SEC: "Banks have provided the services covered by the statutory exceptions for the decades prior to the Gramm-Leach-Bliley Act, and for the five years since its passage, under the effective supervision of the banking agencies and without creating significant securities-related concerns. Accordingly, we strongly believe the Commission should further delay the effectiveness of the statute's 'broker' exceptions in order to continue working to develop regulations that properly implement the statute." The letter was not signed by the regulators' general counsels, as is customary practice, but by their chairmen, Alan Greenspan, Donald Powell, and John Hawke, respectively. Richard Starr, director of governmental affairs for the Bank Insurance and Securities Association and chairman of consulting firm Financial Institutions Group, says the letter was probably the "stake in the heart" of the SEC's timeline, if not of the passage of the rule itself. "Banks have said the SEC is trying to solve a problem that doesn't exist, [and] that would cost them a lot of money to no good end. |
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