FOR IMMEDIATE RELEASE					2001-48




SEC Adopts New Rules Addressing the Bank Exceptions to 
Broker-Dealer Registration in the Gramm-Leach-Bliley Act




Washington, DC, May 11, 2001 -- The Securities and Exchange Commission 
announced today that it has adopted interim final rules that address the 
bank exceptions to broker-dealer registration in the Gramm-Leach-Bliley Act.  
These statutory provisions, which are effective as of May 12, 2001, replace 
the banks' long-standing full exception from broker-dealer registration with 
15 functional exceptions.  Banks that limit their securities activities to 
these 15 functions remain excepted from broker-dealer registration.  Banks 
that engage in additional securities activities, however, either will need 
to register as broker-dealers or shift those additional activities to registered 
broker-dealers.

The interim final rules adopted today respond to questions raised in recent 
months by banks, securities firms, and other interested groups about the 
application of the broker-dealer exceptions.  The Commission is soliciting 
comments on all aspects of the interim final rules and will amend them as 
appropriate in response to comments received.    

Some of the interim final rules adopted today address interpretive questions 
received by the Commission by defining key terms used in the 15 new exceptions.  
Other rules provide targeted exemptions that are consistent with the functional 
exceptions.  

The Commission also is adopting temporary exemptions that give banks additional 
time to comply with the new statutory requirements.  These rules will extend 
the full exception for banks from broker-dealer registration until October 1, 2001.  
They also will give banks until January 1, 2002 before their compensation 
arrangements must meet the conditions of certain statutory exceptions from the 
definition of broker as well as the compensation provisions of the newly granted 
exemptions.  In addition, the rules give banks a temporary exemption that protects 
them from rescission actions arising from a failure to correctly determine 
broker-dealer status. 

Finally, the Commission is adopting a rule that will treat savings associations 
and other thrifts - which are not considered "banks" under the federal securities 
laws - the same as banks for broker-dealer registration purposes.

The text of the new interim final rules will be available on the Commission's 
website at http://www.sec.gov/rules/finrindx.htm.

                     


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