Broker Registration Requirements !!!!!!!!

[FaGal]

March 9: Operational Risk – USSEC Extends Time for Banks to Comply with Broker Registration Requirements

Location: Washington, DC
Author: RiskCenter Staff
Date: Wednesday, March 9, 2005


The Securities and Exchange Commission (Commission) announced yesterday that it issued an order further extending until Sept. 30, 2005 , the compliance dates for banks with respect to certain broker registration requirements contained in the Gramm-Leach-Bliley Act (GLBA). The Commission does not expect banks to develop compliance systems to meet the terms of the “broker” exceptions until the Commission amends its rules. Banks have indicated that they will need time to implement systems to ensure compliance with the new statutory requirements regarding the definition of “broker.”

The GLBA repealed an exception from broker-dealer registration requirements in the Securities Exchange Act of 1934 that had allowed banks to engage in securities activities without registering as a broker or dealer. The GLBA replaced this exception with new functional exceptions that were to become effective May 12, 2001 . On May 11, 2001 , the Commission adopted interim final rules (Interim Rules) that, among other things, gave banks time to come into full compliance with the more narrowly tailored exceptions from broker-dealer registration. To further accommodate the banking industry's continuing compliance concerns, the Commission delayed the effective date of the bank “broker” rules through a series of orders that ultimately extended the temporary exemption from the definition of “broker” to March 31, 2005 .

In June 2004, the Commission proposed to revise and replace the Interim Rules with Regulation B. Today, the Commission extended the exemption from the definition of “broker” until Sept. 30, 2005 , pending its consideration of comments received on the Regulation B proposal. This will give the Commission time to consider fully comments received on Regulation B and to take any final action on the proposal as necessary, including consideration of any modification necessary to the proposed compliance date.