BOCA RATON, Fla. -- At its annual conference here last week, the Securities Industry Association unveiled a four-part plan to help build public confidence in the industry.
The plan by the New York-based trade group entails strengthening the industry's commitment to serving its customers; supporting ongoing education for brokers; ensuring that investors are well-informed; and increasing compliance efforts.
The industry's goal is to ensure that "all customers can be sure their broker represents the highest standards of honesty and integrity," said Howard Clark Jr., the trade group's current chairman.
John L. Steffens, an executive vice president at Merrill Lynch & Co. who will replace Mr. Clark next year, said that many people do not trust brokers. "They take a very dim view of our industry," Mr. Steffens said, "so we have got to persuade them that our clients' interest really are paramount to us."
Many of the speakers at this year's conference, which drew about 670 attendees, said educating both brokers and the public would help reduce compliance problems.
The securities industry is taking steps to "educate our professionals to ensure that they are fully informed of regulatory requirements and ethical standards," said Marc E. Lackritz, the trade group's president.
But some regulators still see special problems when it comes to educating brokers who are based in banks. As a result, organizations advocating industry self-regulation -- such as the National Association of Securities Dealers -- are taking aim at banks' brokerage programs.
"We have proposed a set of rules specifically geared to activities of our members operating on bank premises," said NASD chief executive Joseph R. Hardiman.
The rules cover such issues as how investments should be advertised, what disclosures must be made to investors concerning risk, and how bank employees who are not registered with the NASD can be compensated for referrals.
For example, the NASD has proposed a specific rule that would "prohibit the receipt of noncash compensation for the sale of mutual funds and variable products," Mr. Hardiman said.
"The NASD is moving aggressively to ward off the potential of confusion on the part of investors being offered securities products and services on bank premises," he added.
During a speech at the conference, Arthur Levitt Jr., chairman of the Securities and Exchange Commission, renewed his call for "functional regulation for financial services."
Such an approach would have securities regulators oversee banks' investment sales and management activities.
But Mr. Levitt was not all business in Boca Raton. He also wished for squirrel-proof cables -- referring to an incident earlier this year when squirrels chewed through power lines, causing the NASD's automated stock quote system to break down.