The US Board of Governors of the Federal Reserve System (the Fed) and the Securities and Exchange Commission (SEC) have issued a proposed regulation, called Regulation R, which would implement certain provisions of US law limiting securities activities of US banks.
It has been more than seven years since the Gramm-Leach-Bliley Act 1999 was passed. Gramm-Leach enacted big changes to US banking law to allow qualifying bank holding companies to engage in the full range of securities, insurance and related financial activities.
One of the main provisions of Gramm-Leach was the enactment of the so-called push-out concept. This provision repealed the blanket exception granted to banks in the Securities Exchange Act of 1934 (the 1934 Act) from having to register as broker-dealers or otherwise be subject to SEC jurisdiction when conducting securities activities. (Sections 3(a)(4) and 3(a)(5) of the 1934 Act defined the terms broker and dealer. Another section, Section...