SEC to Get Info on Broker Parents, Units : Securities: The Drexel failure, which occurred when the parent siphoned off the brokerage’s money, led to the new rules.

The Securities and Exchange Commission adopted rules Thursday requiring Wall Street brokerages to hand over reams of information about the dealings of their parent companies and affiliates.

The rules are meant to give regulators an early warning system to detect potential vulnerability at a brokerage resulting from difficulties at its parent or an affiliate, such as a bank or a futures-trading firm.

Brokerages will have to give the SEC data about a parent’s or affiliate’s involvement in real estate, plus holdings of securities, commodities and other sophisticated instruments--such as swaps and derivatives--not listed on a balance sheet.

The data will be filed quarterly under the plan, which will operate on a two-year trial basis. The SEC will refine any kinks before implementing it permanently.

SEC officials want the data to ensure the soundness of brokerages it regulates and to protect investors from fallout caused by the failure of a brokerage parent or subsidiary.

The rules are rooted in the 1990 collapse of Drexel Burnham Lambert Inc., which had millions of dollars siphoned from it by an ailing parent. About 300 domestic and foreign brokerages are expected to provide the SEC with the necessary documents.

Up to now, the agency has had to depend on the cooperation of stock exchanges and the firms for information it wants. “The information comes to us in a spotty and relatively disorganized format,” said William Heyman, head of the SEC’s market regulation division.