September 11, 2003 — BISA members will soon have the opportunity to discuss with the SEC Staff the SEC’s implementation of the Gramm-Leach-Bliley Act’s "push-out" provisions at the BISA Legislative, Regulatory and Compliance Conference to be held in Washington, D.C. on October 8 and 9. Catherine McGuire, Associate Director and Chief Counsel at the SEC’s Division of Market Regulation, who is spearheading this project, will be speaking to participants on October 8. Commissioner Cynthia A. Glassman will also join us on that date.

As part of this implementation effort, the SEC Staff is seeking informal public comment to help it draft a revised set of "push-out" regulations which will govern bank securities activities under the Gramm-Leach-Bliley Act. Attached to this Member Alert are three sets of questions, which the SEC Staff has asked BISA, along with a small number of other trade groups, to distribute to its members. BISA is asking members to provide responses to us by September 25, 2003, in order to show cooperation and further BISA’s dialogue with the SEC Staff on these matters.

The SEC’s first set of questions focuses on the "networking practices" of banks. It is important that the SEC appreciate the diverse arrangements which banks and thrifts presently employ in order to sell securities and annuities. The second set of questions relates to the GLBA money market sweep exception, and the third relates to trust and fiduciary operations and the "chiefly compensated" issue.

Other issues that will later be addressed during this dialogue include are (1) corporate trust issues; (2) trustee and fiduciary issues; (3) custody issues; (4) issues affecting small banks; and (5) other topics, as needed. BISA was selected to co-chair the discussion of financial institution networking arrangements and money market sweep accounts.

Any information supplied to us will be converted to work product which will not disclose the identity of the financial institution when it is submitted to the SEC. However, the material is not protected by attorney-client privilege, and thus could be discoverable.

It is important to engage the SEC in this dialogue in order to improve these important regulations from the Interim Final Rules issued in May 2001. Please take the time to complete and return the Questionnaire to Kathleen W. Collins and/or Jack P. Drogin at Morgan, Lewis & Bockius LLP, 1111 Pennsylvania Avenue, N.W., Washington, DC 20004; fax number 202-739-3001; e-mail address: kcollins@morganlewis.com or jdrogin@morganlewis.com.