NEWPORT BEACH, Calif. — A 1993 Securities and Exchange Commission letter that authorized banks, thrifts, and credit unions to enter into third-party brokerage arrangements under certain conditions without them having to register is still in effect, according to Guy Messick, general counsel for NACUSO.
Messick assured that credit unions can still follow the 1993 SEC letter from Catherine McGuire, Chief Counsel, SEC Division of Market Regulation, to Chubb Securities Corp. NCUA has used the letter as a guide as well as its own Letter 150, which specifically recognized that CUSOs may participate with a credit union and a broker in networking arrangements.
"Sometimes we have had state regulators call into question Chubb. I would hope that we can continue to operate under Chubb until a regulation is in place," Messick said.
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Messick said he anticipates NCUA will look at Letter 150 with "some strong desire to make some changes" once the SEC regulation comes into effect. NCUA confirmed yesterday that it is talking with the SEC on developing a rule for credit unions that will address their needs in the securities activities area. Yesterday, the SEC and the Board of Governors of the Federal Reserve System adopted final joint rules to implement the broker exceptions for banks only. NCUA said yesterday that it is working with the SEC to develop a similar regulation for credit unions.
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