SEC proposal could be a boon for banks.(News)

Investment News, December, 2006

Byline: Sara Hansard `Reg R' would give them a share of reps' commission WASHINGTON - A proposal issued by the Securities and Exchange Commission and the Federal Reserve Board last week could mean a big and long-awaited win for banks. Passed at an open meeting of the SEC here, the action would allow banks to refer their customers to broker-dealers in exchange for a share of the commissions earned from customers' accounts, without having to register as brokerage firms.

The rule is expected to be finalized after a 90-day comment period. The proposal, which would affect thousands of banks, also would let banks continue to accept 12(b)-1 fees for mutual funds used in defined contribution retirement plans managed by bank trust departments....