(The news featured below is a selection from the news covered in the Federal Securities Report Letter, which is distributed to subscribers of the Federal Securities Law Reports.)

Commission Extends Temporary Bank Exemption from Broker Rules

The SEC has extended the temporary exemption of banks, savings associations and savings banks from the definitions of "broker " and "dealer." Interim final rules adopted by the SEC defined certain terms used and granted additional exemptions from the definitions of broker and dealer as amended by the Gramm-Leach-Bliley Act. Rule 15a-7 originally provided for a temporary exemption for banks from the definitions of broker and dealer until October 1, 2001, and provided an additional conditional exemption until January 1, 2002. A separate rule extended the exceptions and exemptions granted to banks under the statute and rules to savings associations and savings banks. The Commission previously granted a temporary exemption from the rule effective until May 12, 2002 (2001 CCH Dec. ¶86,515 ). According to the SEC, based on discussions with industry participants, the rules in their current form will require amendment in the future. Accordingly, the SEC extended the exemption from the definition of "broker " until May 12, 2003, and the definition of "dealer " until November 12, 2002. The SEC stated that the extensions will prevent banks from unnecessarily incurring costs to comply with the statutory scheme based on the current rules rather than the rules that will be in place when amended as anticipated by the Commission.

¨ Release No. 34-45897 is reported at ¶86,636 .