Bank of America Corp. is considering options for its main proprietary-trading desk that include a sale of the business as the giant bank prepares for regulatory changes in the U.S., according to people familiar with the situation.

The Charlotte, N.C., company is weighing the future of the $3 billion desk run by former Merrill Lynch & Co. fixed-income chief David Sobotka, these people said. Among the ideas circulating about the lucrative but relatively small trading operation are to sell the unit or reassign its traders to different parts of the company.

Potential buyers for the trading desk could include private-equity or hedge-fund firms that have fewer restrictions on their trading, one of the people briefed on Bank of America's deliberations said. No decisions have been made, and Bank of America hasn't approached possible buyers, one of the people said.

Bank of America inherited the proprietary-trading desk as part of its purchase of Merrill in 2009.

The discussions come amid a wider reassessment of proprietary-trading units at Wall Street firms such as Goldman Sachs Group Inc. and Morgan Stanley. During the next several years, banks affected by the financial-overhaul legislation signed into law by President Barack Obama last month will have to wind down or curtail their trading businesses.

Banks will have to limit bets made for their own accounts, though many details about how the restrictions work are being left up to regulators. The so-called Volcker Rule also limits bank investments in hedge funds and private-equity vehicles.

Goldman is likely to shutter its famed proprietary trading unit, known as Goldman Sachs Principal Strategies, according to analysts. The firm is highly unlikely to spin off the fund, said a person familiar with the matter.

At Morgan Stanley, the company's Process Driven Trading unit might be spun out over several years, with the company maintaining a minority stake at first, according to a person familiar with the matter.

The PDT unit, which has generated billions of dollars in revenue over the past decade, could be moved to Morgan Stanley's investment-management division, this person added. A decision could be made as early as next month.

Bank of America recently agreed to reduce its private-equity exposure by selling about $3 billion in funded and unfunded private-equity commitments to French firm AXA Private Equity and other investors. The deals will reduce by about half the overall size of Bank of America's private-equity holdings, which stood at $6.4 billion as of June 30.

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