SEC Extends Banks' Temporary Broker Exemption to Sept. 28

WASHINGTON — The Securities and Exchange Commission said late last week that it has extended the temporary exemption of banks from the definition of “broker” until Sept. 28, 2007.

The temporary exemption was scheduled to end July 2, but the agency granted more time to ensure that it and the Board of Governors of the Federal Reserve will have time to carefully consider public comments. The former Regulation B proposed in Spring 2004, now titled Regulation R, allowed credit unions to enter into the same networking arrangements with broker-dealers that banks can, sweep deposit accounts into no-load money market funds under the same terms as banks and to buy and sell securities for investment purposes for themselves, or for accounts for which they act as trustee or fiduciary.