Magazine article American Banker

NASD, Bank Regulators to Coordinate Exams of Broker-Dealers in Branches

Magazine article American Banker

NASD, Bank Regulators to Coordinate Exams of Broker-Dealers in Branches

Article excerpt

WASHINGTON -- The National Association of Securities Dealers and the four bank supervisory agencies said Tuesday that they have agreed to coordinate examinations of bank brokerage units.

The pact, which could lead to fewer examinations for bank affiliates, applies to NASD-registered brokerages that sell mutual funds and other nondeposit investment products on the premises of insured depository institutions. That covers the vast bulk of mutual fund sales at banks.

"It's a terrific agreement," said Ellen Broadman, director of the securities investment and fiduciary practices division at the Office of the Comptroller of the Currency. "It recognizes that the marketplace is changing and that entities supervised by one agency are often supervised by another."

Although the NASD has moved twice in the past month to tighten its regulation of members who sell securities at banks, a top NASD official said Tuesday's announcement was unrelated to those actions.

John Pinto, executive vice president of regulation at the NASD, said he expects that bank regulators will tell the NASD when examiners see practices that violate NASD and SEC rules on compensation, sales practices, and advertising.

The agreement also could pave the way for talks aimed at resolving differences in the rules enforced by the NASD and the bank regulatory agencies, Ms. Broadman said.

The NASD oversees member brokerages, including some that are owned by banks and some that market their wares through banks. The bank and thrift regulatory agencies, by virtue of supervising banks, also oversee bank affiliates that sell brokerage products. …

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