SEC Delays Bank Brokerage Rules

The Securities and Exchange Commission on Tuesday announced another delay in its push to assert its clout over banks in the brokerage business.

The commission said it was extending until March 31, 2005, a legal exemption that bank brokerages have from SEC oversight. The exemption had been scheduled to expire this month.

The SEC has been attempting to impose a new set of rules -- known as Regulation B -- on bank brokerages. But opposition has been fierce.

The Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency have said the SEC proposal would stand in the way of the companies’ offering more products.

Bank industry officials also say the proposal would force the companies to examine individual customer accounts, at a high cost.

“The proposal would severely limit our ability to continue serving our custodial clients” such as pension plans and investment advisors, said Sarah Miller, general counsel of the American Bankers Assn.’s securities association. “Many banks would be out of business.”

The SEC said the extension would give it more time to consider comments on Regulation B.