ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, December 12, 1996 TAG: 9612120016
SECTION: BUSINESS PAGE: B-10 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
Bank employees who sell mutual funds, stocks or bonds would be required to get a stock broker license, under rules proposed by federal regulators.
``The requirements will ensure the investing public that securities salespersons employed by banks have the same level of training as anyone else in the securities marketplace,'' Eugene Ludwig, the comptroller of the currency, said Tuesday.
The comptroller, who regulates about 2,800 national banks, proposed rules that would require bankers to obtain Series 6 and Series 7 licenses if they sell securities. The rules, if approved, would guarantee a basic level of professional competence for bankers as they expand into selling Wall Street-style investments.
The Federal Reserve Board and the Federal Deposit Insurance Corp. offered similar proposals Wednesday.
In recent years, regulators have been putting greater emphasis on ensuring consumers aren't misled about securities sales at banks.
The American Bankers Association supported the new licensing requirements for bankers, despite the increased regulatory burden it would place on banks, said ABA spokeswoman Sonia Barbara.
``We want to be able to show the public that bank employees are properly trained,'' she said.
Currently, some bank employees selling mutual funds have the broker licenses, administered by the National Association of Securities Dealers Inc.
But there has been considerable confusion over who is in charge of supervising the mutual fund and securities sales of bank employees, especially if they work in the commercial bank itself and not its special securities affiliate.
The new regulations are aimed at erasing confusion by allowing the NASD to act as an agent to administer the tests while the FDIC and Fed would police the conduct of the bank employees, industry officials said.
Bank employees with the broker's licenses would be listed in the Central Registration Depository, the securities industry's main licensing and enforcement database, and they would have to comply with continuing education requirements.
The Fed and FDIC declined to provide much detail about their proposals.
The Fed's proposal would cover 300 banks and about 3,000 employees nationwide, spokesman Joseph Coyne said.
Barbara Roper, a securities specialist for the Consumer Federation of America, called the proposal ``a step in the right direction.'' As federal regulators whittle away at the barriers between banks and securities firms, Roper said they also must remove obsolete rules that would impede consumer protection.
LENGTH: Medium: 56 linesby CNB