An executive from J.P. Morgan & Co. will head the National Association of Securities Dealers' new committee for bank-affiliated brokerages.
Dennis C. Hensley, a managing director with the private bank's securities division, was named last week as chairman of the new forum.
Competition for the panel's remaining 11 slots remains hot and heavy, with bankers and bank trade groups lining up to recommend people for the committee.
Observers said Mr. Hensley was a natural choice for the top spot, given his involvement with the NASD. He is the only banker on the association's board of governors, an appointment made last month. Mr. Hensley also held executive positions with the NASD and the Securities and Exchange Commission before joining Morgan as head of regulations and compliance in 1989.
He is currently traveling in Asia and could not be reached for comment.
The NASD, which sets professional standards for the brokerage industry, agreed two weeks ago to establish the bank committee. The decision reflects an acknowledgement of banks' growing role in selling investment products. The Washington-based association estimates that bank branches now account for one-third of the 60,000 offices from which securities are sold in the United States.
The bank panel joins 32 other standing committees at the NASD that represent specific interests, such as insurance.
The new committee, according to its charter, will recommend to the NASD board of governors "rules and procedures governing the securities activities of member firms that are affiliated with financial institutions or provide broker-dealer services and products in connection with - or on the premises of - financial institutions."
An executive at the American Bankers Association said the panel, besides recommending policy, should dispel doubts the NASD may have about banks' ability to offer investment products.
"This is a way of showing that we do operate in an appropriate and responsible fashion," said Sarah A. Miller, senior government relations counsel for the ABA.
The ABA and the Consumer Bankers Association are among industry representatives who have recommended committee members to the NASD.
"We probably have 35 to 40" people or groups who have approached the NASD, said John Pinto, executive vice president overseeing the panel's formation.
Mr. Pinto said the NASD is looking for "a range" of executives, including representatives of bank brokerages, investment product marketing firms, and mutual fund and annuity companies that sell through banks.
NASD staff will recommend about a dozen candidates to the association's board of governors, which has final say on who will serve. Mr. Pinto said he expects the committee to begin operating this winter, in time to have an input into the association's proposed rules for bank brokerages.