FRB: Agencies adopt final rules to implement the bank "broker" provisions of the Gramm-Leach-Bliley Actskip to main navigation skip to secondary navigation skip to content What's New · What's Next · Site Map · A-Z Index · FAQs · Careers Search Advanced Search About the FedNews & EventsMonetary PolicyBanking Information & RegulationPayment SystemsEconomic Research & DataConsumer InformationCommunity DevelopmentReporting FormsPublications skip to content Testimony and Speeches Monetary Policy Report Testimony Speeches Press Releases Monetary Policy Orders on Banking Applications Banking and Consumer Regulatory Policy Enforcement Actions Other Announcements All Press Releases Conferences Home > News & Events > 2007 Banking and Consumer Regulatory Policy Print Joint Press Release Securities and Exchange Commission Board of Governors of the Federal Reserve System For immediate release September 24, 2007 Agencies Adopt Final Rules to Implement the Bank “Broker” Provisions of the Gramm-Leach-Bliley Act The Securities and Exchange Commission (SEC) and Board of Governors of the Federal Reserve System (Board) on Monday announced the adoption of final joint rules to implement the “broker” exceptions for banks under Section 3(a)(4) of the Securities Exchange Act of 1934. These exceptions were adopted as part of the Gramm-Leach-Bliley Act of 1999 (GLB Act). The SEC and the Board approved the final rules at separate open meetings held on September 19, 2007, and September 24, 2007, respectively. The Board and SEC issued proposed rules for comment in December 2006. The final rules are similar to the proposed rules in overall scope and approach. In response to comments, the agencies also have modified the rules in several important respects to make the rules more workable and less burdensome. These changes are discussed in detail in the attached notice, which will be published in the Federal Register shortly. The rules define the scope of securities activities that banks may conduct without registering with the SEC as a securities broker and implement the most important “broker” exceptions for banks adopted by the GLB Act. Specifically, the rules implement the statutory exceptions that allow a bank, subject to certain conditions, to continue to conduct securities transactions for its customers as part of the bank’s trust and fiduciary, custodial and deposit “sweep” functions, and to refer customers to a securities broker-dealer pursuant to a networking arrangement with the broker-dealer. The rules are designed to accommodate the business practices of banks and to protect investors. In developing these rules, the agencies consulted extensively with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Office of Thrift Supervision. Banks do not have to start complying with the rules until the first day of their fiscal year commencing after September 30, 2008. The Federal Register notice is attached. Statement by Governor Randall S. Kroszner Attachment (530 KB PDF) Media Contacts: SECKevin Callahan202-551-4120 Federal Reserve BoardDeborah Lagomarsino202-452-2955 2007 Banking and Consumer Regulatory Policy Last update: September 24, 2007 Home | News & Events Accessibility Contact us External Linking Policy FOIA PDF Reader