The U.S. Securities and Exchange Commission has passed final rules defining how banks can act as securities brokers, in hopes it will spur more competition in the financial industry.

The SEC voted to adopt, jointly with the board of governors of the Federal Reserve System, new rules that will finally implement the bank broker provisions of the Gramm-Leach-Bliley Act of 1999. The board will consider the final rules at its Sept. 24 meeting.

A provision of the Gramm-Leach-Bliley Act amended the definition of “broker” in the securities legislation so that banks would no longer be completely excluded from broker-dealer registration requirements. At the same time, the new law created specific exceptions from the requirements. The proposed rules would give effect to the bank broker exceptions in a way that accommodates the traditional business practices of banks, and at the same time further the SEC’s goal of better protecting investors.

The commission said that one of the major promises of the legislation was to stimulate greater competition in the financial services industry. Much of it has occurred, but not as much as was expected, in part due to ambiguity in the governing legal rules, the SEC said.

“A customer should be able to walk into a financial institution and get any financial product he or she needs — securities, insurance, banking or trust services,” said SEC chairman Christopher Cox.

“But Congress recognized those benefits couldn’t be achieved without new ways to safeguard investors that would be consistent with continued innovation. Today’s historic action, coming eight years after the passage of the law, is long overdue but welcome news for investors who will now begin to see the benefits of broader services and lower costs that the law intended.”