Circular
Agencies Propose Joint Rules to Implement Bank "Broker" Provisions of Gramm-Leach-Bliley Act
December 18, 2006
Circular No. 11832

To All State Member Banks and Bank Holding Companies
in the Second Federal Reserve District:

The Securities and Exchange Commission (SEC) and Board of Governors of the Federal Reserve System (Board) have announced the release of joint proposed rules to implement the “broker” exceptions for banks under Section 3(a)(4) of the Securities Exchange Act of 1934. These exceptions were adopted as part of the Gramm-Leach-Bliley Act of 1999 (GLB Act). The SEC and the Board approved issuing the joint proposed rules for public comment at separate open meetings held on December 13, 2006, and December 18, 2006, respectively.

The proposed rules would help define the scope of securities activities that banks may conduct without registering with the SEC as a securities broker and would implement the most important “broker” exceptions for banks adopted by the GLB Act. The proposed rules are designed to accommodate the business practices of banks and to protect investors. In developing these proposed joint rules, the agencies consulted extensively with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Office of Thrift Supervision.

Comments on the proposed rules are requested within 90 days of publication in the Federal Register, which is expected soon. The agencies request comment on all aspects of the proposed rules.

Press release offsite
Board-SEC notice offsite PDF

Public Information
general.info@ny.frb.org
(212) 720-6130