Citing objections from banking regulators including the Federal Reserve, the Securities and Exchange Commission said it would delay a plan to oversee brokerage services offered by banks until March 31, 2005.
Entities such as the Federal Reserve and the Federal Deposit Insurance Corp. claimed that the SEC proposal to regulate how banks offer brokerage services would interfere with their offering more products and that the added oversight would force expensive examinations of customer accounts.
Under the SEC proposal, banks could sidestep oversight by the regulator if their trust departments aren't compensated for the most part by commission and if employees of the banks who refer customers to affiliated brokers, receive fees of less than $25.
Also, banks with less than $500 million in assets would allowed to make securities trades under the SEC proposal if the revenue is less than $100 million. Currently, about 8,000 banks in the U.S. meet that criteria.
The recent decision by the SEC marks the second time the regulator has imposed a delay on the oversight provisions of the 1999 Gramm-Leach-Bliley Act.
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