SEC Extends Time for Banks to Comply with Gramm-Leach-Bliley Act Broker Registration Requirements


Washington, DC, November 2, 2004 -- The Securities and Exchange Commission announced today that it issued an order further extending until March 31, 2005, the compliance dates for banks with respect to certain broker registration requirements contained in the Gramm-Leach-Bliley Act (GLBA). The Commission does not expect banks to develop compliance systems to meet the terms of the “broker” exceptions until the Commission amends its rules. Banks have indicated that they will need time to implement systems to ensure compliance with the new statutory requirements regarding the definition of “broker.”

The GLBA repealed a full exception that had allowed banks to engage in securities activities without registering as a broker or dealer and replaced the full exception with new functional exceptions. The new functional exceptions were to become effective May 12, 2001. On May 11, 2001, the Commission adopted interim rules (Interim Rules) that, among other things, gave banks time to come into full compliance with the more narrowly tailored exceptions from broker-dealer registration. To further accommodate the banking industry's continuing compliance concerns, the Commission delayed the effective date of the bank “broker” rules through a series of orders that ultimately extended the temporary exemption from the definition of “broker” to November 12, 2004.

Monday, the Commission extended the exemption from the definition of “broker” until March 31, 2005, pending its consideration of comments received on the Regulation B proposal. This will give the Commission time to fully consider comments received on Regulation B and to take any final action on the proposal as necessary, including consideration of any modification necessary to the proposed compliance date.

In June 2004, the Commission proposed to revise and replace the Interim Rules with Regulation B. Proposed Regulation B provides that banks and other financial institutions would begin complying with the final GLBA bank broker rules on January 1, 2006.

The text of the order and notice will be available on the Commission’s website at

Last modified: 11/2/2004