SEC Further Extends Blanket Exceptions for Banks and Thrifts from Registration as Broker-Dealers
Prior to the enactment of the Gramm-Leach-Bliley Act of 1999 (the "GLBA") banks and thrifts were specifically exempt from registration or regulation as a broker-dealer under the federal Securities Exchange Act of 1934 (the "Exchange Act") and thus were not subject to SEC registration, regulation or examination when effecting transactions in securities. The GLBA changed the characterization of "broker" and "dealer" in the Exchange Act and replaced the blanket exemption for banks and thrifts with targeted, specific exceptions for certain bank securities activities, including, without limitation, certain trust activities and third-party brokerage arrangements. These exceptions were described in the December 12, 2000 issue of the Alert. Under the GLBA, the blanket exceptions for banks from the definitions of "broker" and "dealer" were initially to be terminated on May 12, 2001, but were
