The Securities and Exchange Commission and the Federal Reserve Board have jointly released rules to implement “broker” exceptions for banks.

The proposed guidelines help define the scope of securities activities that banks may conduct without registering with the SEC as a securities broker, and would implement important broker exceptions for banks adopted by 1999’s Gramm-Leach-Bliley Act.

Specifically, the two bodies proposed implementing statutory exceptions that would allow a bank, — subject to certain conditions — to continue to conduct securities transactions for its customers as part of the bank's trust and fiduciary, custodial, and deposit functions. It would also allow the institutions referral privileges to a securities broker-dealer.

The SEC and the Fed  approved issuing the joint proposed rules for public comment at separate open meetings held earlier this month.


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