WASHINGTON – To allow credit unions and banks more time to update their systems to make them compatible with broker registration requirements under the Gramm-Leach-Bliley Act (GLBA), the SEC has issued a March 31, 2005 deadline. The GLBA repealed a full exception that had allowed banks to engage in securities activities without registering as a broker or dealer and replaced the full exception with new functional exceptions. The new functional exceptions were to become effective May 12, 2001. On that day, the SEC adopted interim rules that, among other things, gave credit unions and banks time to come into full compliance with the more narrowly tailored exceptions from broker-dealer registration. The March 31, 2005 extension date comes as the SEC continues to review hundreds of comments received on its Regulation B proposal, which would extend certain broker/dealer exemptions to credit unions and banks without registration. In June 2004, the SEC proposed to revise and replace the Interim Rules with Regulation B, which credit unions and banks would have started to comply with starting on Jan. 1, 2006. NCUA, CUNA, NAFCU, and a number of CUs and industry vendors have supported the exemptions, but the Federal Reserve Board, FDIC and OCC have asked for more time to review Regulation B, concerned that it may conflict with existing regulations. The SEC said it "believes that extending the exemption from the definition of "broker" until March 31, 2005, will prevent banks and other financial institutions from unnecessarily incurring costs to comply with the statutory scheme based on the current Interim Rules and will give the Commission time to fully consider comments received on Regulation B and take any final action on the proposal as necessary, including consideration of any modification necessary to the proposed compliance date." [email protected]