WASHINGTON -- More feedback has come from banking groups on a Securities and Exchange Commission proposed regulation that would exempt banks from having to register with the agency for certain brokerage activities.

At one point, under the former Regulation B, credit unions were included in the exemptions, which include entering into networking arrangements and sweeping accounts into no-load money market funds. The enactment of Financial Services Regulatory Relief Act of 2006 extended the exemptions to thrifts but not to credit unions. A SEC spokesman told Credit Union Times that credit unions are still not included even though trade groups have urged inclusion.

Meanwhile, the American Bankers Association commented in a June 7 letter on 12b-1 fees saying that their treatment "as relationship compensation is critical to the fair and workable implementation of the chiefly compensated test under the trust and fiduciary exception." Under the proposed regulation, a bank would be exempt if the bank's aggregate relationship-total compensation percentage is at least 70%. The ABA is concerned that any changes to how 12b-1 fees "would call into serious question whether the 70 percent ratio is a workable standard for the bank-wide exemption." Rule 12b-1 permits mutual funds to use fund assets to finance the distribution of their shares.