Developments of Note
FRB, OCC Issue First Round of Financial Modernization Rules
The FRB and OCC issued the first round of rules designed to implement the provisions of the Gramm-Leach-Bliley Act (the "Act") permitting bank affiliates to engage in a broader range of financial activities. As has been previously reported, the Act will permit bank holding companies ("BHCs") that qualify as financial holding companies ("FHCs") to engage in a broad range of securities activities (e.g., mutual fund sponsorship and distribution), insurance underwriting (including life, and property and casualty) and merchant banking transactions (acquiring enterprises, even commercial enterprises, for investment purposes). Banks also may engage, through financial subsidiaries, in a broader range of financial activities than has been historically permitted. A copy of the firm’s comprehensive summary of the Act is available upon request.
