BOCA RATON, Fla. - Bankers gathered for a securities sales management forum here last week were grumbling about rules being heaped on them by regulators.
Many bankers at the conference, which was sponsored by the American Bankers Association, called on regulators to level the playing field for bank-affiliated brokerage units and securities firms.
Brokerage firms "are not regulated on things they do on our turf, but we are regulated on things we do on theirs," griped one banker.
At a roundtable discussion, bankers had an opportunity to voice their concerns to representatives from the National Association of Securities Dealers, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission.
Unlike securities firms, bank-affiliated brokerages are required to disclose that products offered through their securities units are not backed by the Federal Deposit Insurance Corp. or any government agencies. However, Treasury bills, which are backed by the government, are sold through banks securities units, William H. Zoellner, managing director of Barnett Banks' brokerage subsidiary pointed out.
"Why do we have to say that?" he asked William Dehnke, the OCC's assistant director.
"That is misinforming customers," agreed Sarah M. Miller, senior government relations counsel for the ABA.
In response, Mr. Dehnke would only say that the OCC was "looking into that."
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Another bone of contention is the use of boilerplate disclosures, especially on orders made by customers telephoning in a trade request.
"An incoming call is a heck of a lot different than an outgoing call," said John Ward Logan, executive vice president at First American Corp., Nashville, differentiating between solicited and unsolicited trades.
"To stop in the middle of a trade and read the disclosures to a customer who might be buying Home Depot (stock) for the third time that day is terribly disruptive," Mr. Logan said.
The difference between banks and brokerage firms is that "people are now buying uninsured products" from banks - where traditionally products have been insured, said Walt Robertson, the NASD's compliance director.
Mr. Robertson also said that the NASD, which sets professional standards for the brokerage industry, wants to know what bankers' complaints and concerns are.
"I talked to more banking people in the last year than I ever have in my life - including when I've applied for mortgages or loans," Mr. Robertson said.
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Others at the conference said they were growing weary from bowing to regulators' ever-changing requests.
Last year, PNC Bancorp. had several sets of regulators traipsing through its branches and recommending changes on disclosures made in marketing materials, said Joel Calvo, president of Pittsburgh-based PNC Brokerage Corp.
Calling on regulators from the NASD, OCC, and SEC to decide once and for all what disclosures should spell out, Mr. Calvo said: "Tell us what you want us to say and we'll do it."
But bankers here got no promises of relief from regulators.
"The disclosure issue is constantly in flux," said Jack Drogin, senior counsel for the SEC. "It is difficult to say what will be required in a year."
In the spirit of pleasing regulators and disclosing the risks associated with uninsured investments, Barnett now has a "skull and bones on everything," Mr. Zoellner said.
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This year's conference, the largest the group has put on, attracted 80 bankers, twice the size of the attendance two years ago.
John E. Foster, managing director of SunTrust Banks' SunTrust Capital Markets unit, commended attendees on coming to balmy Florida and being "brash enough" to ask their bosses to send them to Boca Raton after 1994's bear market.
