After three months of fine-tuning, the National Association of Securities Dealers has issued its final proposal to create a new framework for bank-affiliated broker-dealers.

The proposal now goes to the Securities and Exchange Commission for further review. Final approval is expected by midyear, industry lawyers said.

"These rules are intended to eliminate any confusion between uninsured securities products of broker-dealers and insured deposit products of financial institutions," said John E. Pinto, executive vice president of regulation at the NASD. The association, based in Washington, sets professional standards for the brokerage industry.

The plan contained few surprises, apart from its size. It came in at 1,235 pages.

"I think the meat of it will be in the first 65 pages," said Sarah A. Miller, senior government relations counsel for the American Bankers Association. She said the NASD, which took its first crack at the rule in November 1994, had addressed most of the banking industry's concerns.

The initial draft drew bankers' wrath, with many saying it conflicted with or duplicated existing rules of bank regulators.

Mr. Pinto said the association had "honestly taken into account the comments made by our members. We've tried to insure consistency with the guidelines that have already been issued by bank regulators."

The proposal, issued last Thursday, did leave intact certain provisions that banks had lobbied hard to change.

For example, the NASD kept a provision that prohibits brokerages from directly compensating bank employees for referrals. And the agency still requires that bank customers give written permission before information about their finances can be shared with brokers.

Under the proposal, banks would be able to share customers' names, addresses, and telephone numbers, as well as credit reports, with affiliated brokerages. Bankers had argued that such information sharing is crucial to their cross-marketing efforts.

Ms. Miller said the NASD still needs to clarify some points. For instance, the proposal limits investment sales in areas "where retail deposits are taken," but does not explain exactly what this means, she said.

But for the most part, bank brokerage executives could find little to complain about.

"It almost appears that everything we took exception to was stricken," said Joel Calvo, president of PNC Brokerage Corp., Pittsburgh.

For instance, Mr. Calvo said he was pleased that the NASD dropped a requirement for brokers to give a lengthy explanation of how Securities Investor Protection Corp. insurance works.

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