John Pinto isn't exactly popular with bankers these days. Mr. Pinto is architect of the National Association of Securities Dealers' controversial plan to regulate bank broker-dealers. The plan, unveiled in December, has been blasted by bankers as a prime example of regulatory overkill. For his part, Mr. Pinto - the NASD's executive vice president for regulation - vigorously defends the proposed rules. Bank regulators, he maintains, lack the authority to regulate broker- dealers adequately. By filling this regulatory gap, the NASD is simply fulfilling its mission of safeguarding customers, he said. Mr. Pinto, 51, is a 26-year veteran of the Washington-based NASD, a trade group that sets professional standards for broker-dealers. He oversees a staff of 850 - more than one-third of the NASD's work force - and his domain includes advertising, compliance, market surveillance, and enforcement. Mr. Pinto said he expects the bank broker-dealer rules to be adopted this fall, after a public comment period and review by the Securities and Exchange Commission. He elaborated on his views in a recent interview with American Banker.
Q.: Bank regulators say they are doing just fine in policing investment sales. So why is the NASD stepping into the picture?