Citing privacy concerns raised by the know-your-customer debate, the government is delaying a proposal for broker-dealers to file suspicious activity reports.

Peter G. Djinis, associate director of the Treasury Department's Financial Crimes Enforcement Network, or Fincen, said his agency would not submit a broker-dealer proposal until at least this summer.

"It's better to redouble our efforts at the front end than at the back end," Mr. Djinis said Tuesday. Fincen has been working on the broker-dealer proposal for more than two years.

Banking industry officials charged the delay gives nonbanks an unfair competitive advantage. "Why is it only the banks that are subject to these requirements?" said Robert Rowe, regulatory counsel at the Independent Bankers Association of America. "If the government is serious about fighting money laundering, they need to fill the gaps."

Under a 1992 law, Fincen was authorized to write suspicious activity reporting rules for all financial firms. The agency's first rule, covering banks, thrifts, and credit unions, went into effect in April 1996. But competing industries, including brokerage houses, have so far avoided coverage. Separate rules for casinos, check cashers, currency exchangers, and money transmitters are expected in several months.

Some securities industry officials said banks are overreacting to the delay. Broker-dealers that are subsidiaries of bank holding companies are required to file suspicious activity reports, they said, while some independent brokerages are complying voluntarily.

"The brokerage industry has taken the 'good citizen' approach," said Ben J. Szwalbenest, an anti-money laundering officer at Bear, Stearns & Co., which is complying voluntarily.

"I'd rather (Fincen) get it right th an to rush something out without input from the industry," said Stephen Shine, senior vice president at Prudential Securities, which is also complying voluntarily.

But a brokerage industry source said Fincen's delays are annoying. Part of how we convince the business side of our companies to comply is by saying that "very soon, federal law will require us to do that," the source said. "But when you're saying that for two, three years in a row, it makes it difficult to do it with real credibility."

Mr. Djinis said the broker-dealer proposal has been the toughest to devise. "It's not as easy as just saying, 'Now, take out the word "bank" and insert the word 'dealer,'" he said. "Broker-dealers do their business in many respects substantially differently than banks do."

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