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ARTICLE · 10 JANUARY 2007

Proposed Regulation R Retains Bank Securities Functions

Reed Smith
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The Securities and Exchange Commission (on Dec.13, 2006) and the Board of Governors of the Federal Reserve System (on Dec. 18, 2006) jointly proposed Regulation R, which would clarify the securities powers of banks under the Gramm-Leach-Bliley Act).

United StatesFinance and Banking
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Article by Michael E. Bleier and Byron F. Bowman

The Securities and Exchange Commission ("SEC") (on Dec.13, 2006) and the Board of Governors of the Federal Reserve System ("Fed") (on Dec. 18, 2006) jointly proposed Regulation R, which would clarify the securities powers of banks under the Gramm-Leach-Bliley Act ("GLBA").1 In contrast to regulations previously proposed solely by the SEC, Regulation R would enable banks to continue many securities activities in which they engaged prior to the enactment of GLBA, without significant disruptions in their operations. In addition, Regulation R grants banks additional flexibility in areas such as the referral of customers to affiliated brokers and the performance of mutual fund transactions for their customers.

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