Comptroller Allows Banks to Sell Unit Trusts, Funds as Agents

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Comptroller Allows Banks to Sell Unit Trusts, Funds as Agents

WASHINGTON -- The Office of the Comptroller of the Currency recently approved, for the first time, applications of nine national banks to sell unit investment trusts and mutual funds as agents for their customers.

The Comptroller's office did not announce its action formally, but it became known this week when the office made public a letter it sent to the Securities and Exchange Commission in late May. A spokesman for the Comptroller's office on Wednesday confirmed the action on the nine banks.

The nine banks were given permission to set up subsidiaries to act as agents in buying or selling units in unit investment trusts and shares in mutual funds, solely at the request of their customers. These activities do not constitute underwriting of unit trusts or mutual funds, the Comproller's office ruled.

In theory, permitting these activities represents an expansion of bank brokerage services, although in practice the decision rubber-stamps activities in which many banks have already engaged, banking industry analysts said.

Banking regulators have approved other brokerage services for banks, and the approval of mutual funds and unit investment trusts is not necessarily another step toward broader securities powers. "It's just a question of whether these instruments can be included in the existing 'step,' and that answer is yes," said a lawyer in the Comptroller's office.

Three of the nine banks -- Crocker National Bank in San Francisco, First National Bank of Chicago, and Continental Illinois Bank and Trust Co. of Chicago -- are among the 20 largest banks in the United States. …