The privacy issue is still simmering, and the brokerage industry is worried it may come to a boil.

The Gramm-Leach-Bliley Act (GLB) requires regulators such as the SEC to devise privacy rules that parallel provisions in the law. But in May, President Clinton proposed even stricter privacy protections, which has helped keep the issue alive.

Under GLB, consumers must take action to prevent disclosure of their financial information. An SEC rule approved in June defines how brokerages must give clients notice of their right to opt out of any information sharing.

But Clinton proposed a stronger "opt in" policy whereby information could not be shared unless customers give express permission.

However, the SIA says stricter privacy controls would create operational burdens and inhibit e-commerce.

"We're supportive of the privacy legislation in GLB, and believe it should be given a chance to be implemented and put into effect in the marketplace," says Alan Sorcher of the SIA's office of general counsel in Washington, D.C.

But it's an election year, so "the privacy issue is going to be around for a while," Sorcher adds.

* Financial institutions are required to disclose at least annually policies for collecting and sharing customers' nonpublic, personal information.

* Customers are required to take action to opt out of information sharing.

* Disclosure of customer information to third-party marketers is prohibited, with an exception for joint marketing efforts with nonaffiliated firms.

* Financial information can be shared with affiliated firms, such as between Citibank and Salomon Smith Barney.

* The Treasury Secretary must conduct a study of information sharing among affiliated financial firms. That report is due January 2002.--T.N.