WASHINGTON - A day before financial institutions could start exercising the powers allowed under the Gramm-Leach-Bliley Act, regulators on Friday released a flurry of implementing rules and identified some of the banks poised to test the waters of financial reform.

The Federal Reserve Board issued a list of new activities permissible for financial institutions under the law. At the same time, the Office of the Comptroller of the Currency published a final rule governing financial subsidiaries and released a list of banks that have applied for them.

The Fed's list of new powers significantly expands the areas of business open to financial institutions but does not go as far as some would have liked.

Gramm-Leach-Bliley created a new entity, the financial holding company - essentially, a bank holding company with expanded powers. According to the law, after March 11 financial holding companies will be able to own subsidiaries that engage in all activities previously allowed to bank holding company affiliates, plus a broad range of new ones.

Also, the Fed on Friday met in closed session to vote on a proposed rule governing merchant banking activities by financial holding companies. An agency spokesman refused to disclose the result late Friday, but sources said the proposal could be released as early as Monday.

The law itself specifically allows numerous new activities. These include: lending, exchanging, transferring, investing, and safeguarding securities and money for a third party; underwriting and selling insurance; providing financial, investment, or economic advisory services; issuing and selling interests in pools of assets banks cannot hold directly; underwriting, dealing, and making a market in securities; merchant banking; and engaging through an insurance company affiliate in investment activities.

In addition, the Fed list says financial holding company affiliates may provide management consulting services; operate a travel agency; and organize, sponsor, and manage mutual funds.

Trade groups such as the Financial Services Roundtable had lobbied the Fed to give holding company affiliates other powers as well, including the ability to operate a real estate brokerage; act as a paid finder, or middleman, in financial transactions; and provide data processing services that extend beyond those currently permitted.

None of these activities was allowed, but the proposed rule lays out a specific procedure that financial institutions and others can follow to ask the Fed and Treasury Department to decide whether other specific activities are permissible.

"The Fed was cautious in its first step," said Richard M. Whiting, executive director and general counsel of the Financial Services Roundtable. "It switched the burden back to the industry to demonstrate the appropriateness of certain activities."

The law lets national banks own financial subsidiaries that engage in most, but not all, of the new activities that are available to financial holding company affiliates. Financial subsidiaries are barred from real estate investment and development, insurance underwriting, and merchant banking.

The OCC on Friday released a list of 10 national banks that have stated to it that they meet the criteria to own financial subsidiaries, including sufficient capitalization and strong management. Of these banks, nine went further, notifying the Fed of specific plans to create one or more operating subsidiaries.

Among the nine is Community First National Bank of West Plains, a three-year-old, $45 million-asset bank in West Plains, Mo. Executive vice president Scott Corman said the bank is creating a subsidiary so that it can offer brokerage services and has already hired a broker who will be stationed in the bank once the application is approved.

The other banks that filed specific plans with the OCC, including Bank of America Corp. and Wachovia Corp., indicated that they intend to use their financial subsidiaries to sell insurance.

In a related action, the Fed issued a proposed rule that would let state-chartered banks that are members of the Federal Reserve System own financial subsidiaries. The rule is intended to establish parity between state member banks and national banks.

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