Securities Group’s Proposal Is Said to Widen Banks’ Role

The Securities Industries Assn., which for years fought the entry of commercial banks into the securities business, may reverse its longstanding opposition to ending such restrictions, securities industry sources said Wednesday.

The sources said the trade group’s board will consider a draft proposal for a wider commercial bank role in the business at the group’s annual meeting this week in Boca Raton.

The proposal seeks to end the group’s opposition to the removal of Glass-Steagall restrictions on commercial banks engaging in investment banking activities.

The Glass-Steagall Act, which has stood since the 1930s to divide the securities and banking businesses, effectively barred commercial banks from engaging in most investment banking activities until recently.

The unidentified sources said the SIA step, if it is given the board’s stamp of approval, reflects a growing reality that Glass-Steagall is essentially dead and only remains to be given a final burial.

“It’s apparent to almost everyone that Glass-Steagall is going to go--one way or other,” one industry source said.