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FINRA Releases Highlights from Reg BI Conference

Regulation Best Interest (“Reg BI” or the “Rule”), which will be effective June 30, 2020, establishes a “best interest” standard of conduct for broker-dealers and associated persons when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities, including recommendations of types of accounts. Complying with the Rule will create some fiduciary hurdles for broker-dealers and investment advisors, in particular for retirement advisors. Although the compliance date is still months away, broker-dealers need to have a plan to adopt and implement the Rule, which sets forth a new standard of care.

On December 18, 2019, FINRA hosted a Reg BI conference in Washington, D.C. for member firms to discuss best practices and approaches, where several speakers provided tips to help broker-dealers begin and continue the implementation process.

FINRA released highlights from the Reg BI Conference.  The SEC also published Frequently Asked Questions on Reg BI, which will be updated from time to time.

In addition, the SEC published Small Entity Guide for Reg BI to educate firms to facilitate compliance with the Rule.

Do not wait. Contact your PKF O’Connor Davies team.

Victor Peña, CPA, CGMA
Partner
vpena@pkfod.com

Mike Provini, CPA
Partner
mprovini@pkfod.com

Sources:

Regulation Best Interest: The Broker-Dealer Standard of Conduct