Not only did the SEC’s Regulation Best Interest (Reg BI) take effect about two years ago, since then, its had tongues wagging, according to questce.com. The topic continued to flash plenty of energy at FINRA’s recent 2022 Annual Conference.
So, what insights have been gained since Reg Bi was implanted and, to this point, what’s clicked for firms? Have any conflicts been isolated?
A few pieces:
1.) FINRA will be Conducting Deeper Reg BI Exams
FINRA wasted no time acknowledging that, down the road, it will undertake deeper reviews of Reg Bi and Form CRS.
2.) Audits Unveiled Some Good (and Bad) Behaviors
3.) Product Decision Trees Should be Documented
4.) Training/Policies Needs to go Beyond Rule Definitions
Meantime, senators recently were informed by Gary Gensler, chair of the Securities and Exchange Commission, that additional resources are required by the agency, according to thinkadvisor.com. The exam division’s “work is essential to ensuring strong compliance across the board,” including “work to test for compliance with Regulation Best Interest,” he continued.
The enforcement division’s “doing more with less,” Gensler said in testimony before the Senate Banking Committee, the site continued.
The tip line was burning in fiscal 2021, with the agency handling 46,000 tips, complaints and public referrals, the chair added. Five years earlier, that number stood at about 16,000.