Having said this, we have asked the NASD to revisit aspects of the rule that may be too burdensome, such as the requirement to obtain trade-by-trade approval for transactions that are "away from the broker-dealer.". After receiving significant banking industry criticism, however, the Commission tolled the implementation.
In my view, the NASD rule is a necessary safeguard against insider trading, manipulation, and other violations of the federal securities laws.
Mentoring
Under that exception, a bank is excepted from broker-dealer registration if as part of its "customary" banking activities, it engages in, for example, pledges and stock loans as custodian.
In the Gramm-Leach-Bliley Act, Congress adopted functional regulation as the principal safeguard to address these conflicts while providing banks with full organizational freedom to recombine as commercial and investment banking conglomerates. 17102
Second, the Act accelerated the public reporting of insider transactions from 10 days after month end to two business days after execution of the transaction. It is not a matter of indifference to the bank whether the customer buys an interest in the fund or makes some other investment. As previously discussed, the only fees received on a fiduciary account frequently will be fees paid by mutual fund companies." Organizational Consulting
This Association's comment letters articulately described the banking industry's primary concerns. To reply simply to these complex arguments, taking orders from investors is the sine qua non of broker-dealer activity, and the Exchange Act requires the Commission to regulate all broker-dealers. 520-269-6875. But before I begin my comments, I must remind you that my remarks represent my own views, and not necessarily those of the Commission or my colleagues on the staff. The bottom line is that aggressive training and coaching are indicated to build the talent bank so that the dual-hatted role is no longer needed. The Commission also prepared four studies contemplated by the Act.
Where Have All The Business Mentors Gone? In addition, the comment letters criticized the Commission's implementation of the networking and sweep exceptions as overly restrictive. All Rights Reserved. First, I believe that the trust and fiduciary activities exception reflects a judgment in the Exchange Act that banks may engage in securities transactions as part of trust and fiduciary relationships without the investor protection standards found in the federal securities laws when banks are acting as and paid as fiduciaries.
This includes the manager and supervisor of the registered representative or any other person in a position to direct, influence, or profit from the registered representative's securities activities.