The National Association of Securities Dealers on Tuesday approved a rule that seeks to eliminate customer confusion about mutual funds sold on bank premises and urged the Securities and Exchange Commission to adopt it promptly.

The rule would require brokerages to sell securities in a location separate from the main banking area. Companies also would have to explain to customers the differences in risk between securities like mutual funds and bank products such as certificates of deposit.

The SEC has the option of adopting the rule immediately or issuing it for public comment before making a decision. The SEC issued a similar proposal for comment last March, and the latest NASD rule makes changes to accommodate some concerns raised at that time.

"We'd hope and ask the SEC to consider adopting this rule without republishing it," said Clark Hooper, an NASD senior vice president. SEC spokesman John Heine declined comment.

One change in the rules approved yesterday would extend to all brokerages-not just those that operate on bank premises-the requirement that they disclose to customers the risk of the banking or securities product sold, Ms. Hooper said. The NASD plan would affect about 4,000 banks that offer investment products to their customers, the American Bankers Association has estimated.

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