Turning Probabilities Into Realities

  1. FINRA
  2.  → Brokers to be tested by FINRA for Regulation Best Interest “preparedness reviews”

Brokers to be tested by FINRA for Regulation Best Interest “preparedness reviews”

On Behalf of | Nov 12, 2019 | FINRA, Firm News |

Brokers to be tested by FINRA for Regulation Best Interest “preparedness reviews”

Brokers and firms should be familiar with the Regulation Best Interest (RBI) plan, implemented by the U.S. Securities and Exchange Commission (SEC). Firms have until June 30, 2020 to comply with RBI. Here’s a checklist to make sure your firm is compliant.

Brokers who haven’t looked at the checklist may want to take a quick review this month. The Financial Industry Regulatory Authority is conducting RBI “preparedness reviews” in November 2019. Firms that aren’t caught up on RBI don’t have to panic.

“Come July 1, 2020… I suspect we will still not be doing gotcha exams,” said John Polise, associate director of the broker-dealer and exchange program at the SEC’s office of Compliance Inspections and Examinations, according to Financial Advisor IQ. “The point is between now and the effective date, in the course of other examinations, we may very well ask, ‘What are you doing with BI (best interest), what are you thinking about with BI, and how are you thinking about approaching it.”

Polise and other SEC officials say the point of the exams is to make sure firms are compliant. He assures brokers that regulators are not looking to punish during these exams.

Details of what the tests include and how it will be administered are not revealed by Financial Advisor IQ or FINRA’s website. Part of the testing is to make sure FINRA and the SEC’s rules don’t overlap.

“FINRA staff expects to work with SEC staff to ensure consistency in examining broker-dealer and their associated persons for compliance with (RBI),” FINRA wrote on its website. “In addition, FINRA will review FINRA rules to see whether changes are needed to align FINRA rules with the SEC’s rule making. Any proposed changes to FINRA rules will be filed with the SEC for public comment and available on FINRA’s website.”

Luckily for you, the Spencer Law Firm already knows about RBI. Read our post about it here.

The Spencer Law Firm’s attorneys assist in securities related proceedings such as FINRA and SEC enforcement proceedings, arbitration and general regulatory actions. The Spencer Law Firm assists individual investors and those who have securities claims brought against them by investors, FINRA or the SEC in litigation. If you have any questions regarding securities matters, please feel free to call Bonnie Spencer at the Spencer Law Firm at (888)237-459 to see what we can do for you. You can also visit us at Spencer-Law.com or at our office at 4635 Southwest Freeway, Suite 900, Houston, Texas, 77027.