SEC Gives Broker Exemption to CUs

WASHINGTON – The Securities and Exchange Commission approved regulations today allowing credit unions and banks to continue selling securities products and services to their members without having to register with the SEC, scoring a major victory for credit unions. The regulations, known as Reg R, must now be approved by the Federal Reserve, which is also expected to approve the measure. The rule will allow credit unions to but and sell securities for members; to sweep member deposits into a no-load money market mutual fund; buy and sell U.S. government and municipal securities and commercial paper for members; buy or sell securities as part of a pension, profit-sharing, bonus or dividend reinvestment plan. The regulation is a long time in coming and was part of the 1999 Gramm-Leach-Bliley Act, which gave banks the ability to enter the securities market without having to do so under a subsidiary agreement. The proposal means that most credit unions will be able to conduct broker-dealer activities in-house, and not have to form a CUSO for that purpose.