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Day: January 10, 2020

FINRA Plans Review of Regulation BI Compliance Among Other Examination Priorities

 FINRA plans to examine firm compliance with new Regulation Best Interest, Form CRS and related SEC guidance and interpretations during the upcoming year, according to its 2020 Risk Monitoring and Examination Priorities Letter.  FINRA will review whether firms have implemented procedures and training, whether their reps observe the best interest standard of care, how the firm guards against excessive trading, and the extent to which firms identify and address conflicts of interest.  Other significant priorities include sales practices and supervision (especially complex products, variable annuities, private placements, mark-ups/downs, and senior investors), trading authorization, best execution, TRACE reporting, and cybersecurity.

It is notable that FINRA intends to prioritize Regulation BI in the first year.  Usually, the regulators give some time for firms to put operations in place before conducting regulatory sweeps for compliance with new laws and regulations.