WASHINGTON — With more than 120 comment letters received, the Securities and Exchange Commission recently said it's ready to move forward on approving a regulation that will extend broker-dealer exemptions to banks by July 2.
At issue is the former Regulation B proposed in spring 2004, now titled Regulation R, which allowed credit unions to enter into the same networking arrangements with broker-dealers that banks can, sweep deposit accounts into no-load money market funds under the same terms as banks and to buy and sell securities for investment purposes for themselves, or for accounts for which they act as trustee or fiduciary.
The Financial Services Regulatory Relief Act of 2006 enacted in late 2006 required the SEC to work with the Fed to jointly issue another proposal to clarify these exceptions. This provision of Reg Relief extended these exceptions to thrifts, but not to credit unions.
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SEC Chairman Christopher Cox recently said that the agency is aiming to finalize Regulation R by July 2, but there's still no word on whether credit unions will be included in those exemptions.
"One of my fellow Commissioners, Paul Atkins, contends that Regulation B stands for 'broken'–and the new Regulation R stands for 'repaired,'" Cox said. "Very soon, we'll see, because we're now taking all of the comments into account and preparing to consider a final Regulation R at both the SEC and the Federal Reserve Board."
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