WASHINGTON — Credit unions are being reminded to either take steps to transfer their brokerage services out of CUSOs or ensure that the CUSOs are registered with the Securities and Exchange Commission, CUNA said.

The reminder comes in light of a 2001 rule change that no longer allows third party networking arrangements in which CUSOs offer brokerage services without the requirement to register with the SEC. A change within NCUA's incidental powers rules in 2001 allowed FCUs to provide these services directly and to derive income from these activities for the first time. State-chartered CUs in those states that allow CUs to provide brokerage services are also impacted, according to CUNA.

Since 2002, CUNA's CUSO Broker Activities Task Force has been working with the SEC to develop an orderly transition process to implement this significant change that will impact the securities activities that credit unions and CUSOs may perform, said Jeff Bloch, senior assistant general counsel of CUNA. BATForce, who has also worked with the SEC to allow certain registration exceptions for CUs including sweep accounts and networking arrangements.