We support requiring financial institutions to disclose their privacy policies to their customers and prospective customers. We are also sympathetic to giving customers the ability to decide whether their personal financial information will be shared, even among affiliates, and particularly when it is to be used for marketing purposes. Any legislative proposal to heighten financial privacy protections needs to balance a number of concerns. First, information sharing may be necessary for a financial services provider to be able to do its job. A broker- dealer, for example, must be able to share elements of its customers personal financial information with other brokers or clearing agencies in order to clear and settle trades.
Information sharing can also be a cost-saving device for financial services providers.
As firms consolidate, they enjoy many efficiencies of scale, including the ability to avoid duplicative information gathering. Customers, as well as firms, can benefit from these efficiencies. Customers, however, should know when their personal information is going to be shared, and they should have a voice in saying how far that information should go. The Commission also strongly supports an exception for information shared in the context of executing transactions. Elements of apparently seamless securities transactions often involve parties that must share customer information in order to continue to provide the services customers have come to expect.