FINRA to Review Members for Regulation Best Interest Preparedness

October 31, 2019 by ACA Compliance Group


Last week, William St. Louis, FINRA Senior Vice President and Regional Director, stated at the SIFMA C&L New York Regional Seminar that the regulator would begin reviewing firms in November to assess their Regulation Best Interest (“Reg BI”) compliance readiness. Reg BI becomes effective on June 30, 2020.

In addition, he said that FINRA would coordinate its reviews with the SEC to eliminate any duplication of effort. St. Louis further stated that, while FINRA would not be looking specifically for Reg BI infringements, it would not ignore any “egregious violations.”

ACA Guidance

As June 30, 2020 approaches, at minimum firms should ensure that their systems, policies, and procedures have been designed to comply with the following four obligations of Reg BI:

  • Disclosure obligations
  • Care obligations
  • Conflict of interest obligations
  • Compliance obligations

In addition, firms should begin drafting their Customer Relationship Summary (“Form CRS”). Form CRS, which outlines the scope of a firm and its representative relationships and services, will be provided to customers at prescribed times.

Additional Resources

For More Information

For more information about Reg BI, please contact your ACA consultant or Dee Stafford at 561-628-5288 or dstafford@acacompliancegroup.com.