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Legal Landscape: Current Topics of Interest, Calculating Compliance for the Trust/Fiduciary "Push-Out" Exception

Congress repealed the across-the-board exemption for banks from broker-dealer registration upon the enactment of the Gramm-Leach-Bliley Act.  After contentious debate between the banking industry, bank regulators, and securities regulators, the SEC and the Federal Reserve Board jointly issued Regulation R to implement the so-called “push out” rules. Now, nearly eleven years after the Gramm-Leach-Bliley Act, banks that administer trust and fiduciary accounts must be prepared to prove that they are in compliance with the “trust and fiduciary” exception to the push-out rules.