The brewing battle over the National Association of Securities Dealers' plan to regulate bank brokerages broke into open hostilities last week.
On the eve of the Feb. 15 deadline for comments, a top aide to the Comptroller of the Currency took the trade group to task, saying it should have tried to cooperate better with banking regulators.
Though such statements could be dismissed as regulatory posturing, banking lawyers said there's more to it.
"It's a clear message to the NASD not to go off on their own," said Charles M. Horn, a law partner with Mayer, Brown & Platt, Washington.
The trade association, which sets professional standards for the brokerage industry, was bombarded with 200 letters on its proposal. A spokesman for the Washington-based association said it was a heavy response.
NASD officials have vigorously defended their proposal, saying tighter rules for bank brokerages are needed to protect investors.
But banking industry trade groups have been urging their members to weigh in with criticisms of the plan, which they have attacked as regulatory overkill. It is expected that many of the comment letters have come from banks unhappy with the plan.
The comments will be reviewed by the securities dealers group's staff and national business conduct committee. Association officials say the responses will also go before the bank brokerage committee, once the group forms one.
Bankers say they are eager to see the outcome of the NASD's deliberations. "We're paying close attention to what's being done," said Jonathan J. Palmer, chief retail banking and technology officer at Barnett Banks Inc.
And what are the chances the rules will be adopted in their current form?
"The NASD needs to work on the proposals," Mr. Horn said. "Hopefully, they will listen to the comments."