WASHINGTON - The Securities and Exchange Commission is expected in early June to issue privacy rules mirroring those adopted by banking regulators this month.
The securities agency is the only one of seven federal agencies to miss the May 12 deadline mandated by the Gramm-Leach-Bliley Act.
SEC special counsel George Lavdas refused to explain why the SEC was unable to meet the deadline, but industry representatives said the delay is innocuous.
"We'd like to have the rules now, but everyone understands that the SEC has a harder job than the banking agencies. They had to go back after model regulations were made for the banking industry and retrofit them to fit the securities industry," said Alan Sorcher, assistant general counsel at the Securities Industry Association.
The SEC is not expected to allow securities firms to use the implementation examples described in the rules as "safe harbors" from potential lawsuits. Foreign securities firms registered in the United States will be covered by the rules; the banking agencies did not apply their rules to unregulated foreign banks operating in the United States.
The Federal Deposit Insurance Corp., Federal Reserve Board, Federal Trade Commission, Office of the Comptroller of the Currency, Office of Thrift Supervision, and National Credit Union Administration approved regulations the week of May 8 detailing how financial institutions must establish and disclose privacy policies and give customers a chance to block sharing of confidential information with unaffiliated third parties.
