Reg BI Continues To Tantalize And Frustrate Advisors And Regulators Alike
December 23, 2019 by Contributor
(JDSupra) My young boys will sometimes chase me around the house, catch me, and yell “gotcha” as they drag me off to their pretend jail. No matter how much I plead that I’ve done nothing wrong, I always end up in jail, despite having no knowledge of any rules that I’ve broken – because they just make it up as they go along. Unfortunately, it is starting to sound like complying with Reg BI might be a bit like that.
If you’ve paid attention to this blog (or many other commentators out there), you probably know that there is growing concern in the industry that there is simply not enough guidance for broker-dealers to allow them to feel comfortable that they will be in compliance with Regulation Best Interest (“Reg BI”) when it takes full effect in June 2020. We previously voiced concerns that there are mixed messages coming from the upper ranks at FINRA regarding whether Reg BI will operate in tandem with or in replacement of FINRA’s traditional suitability standards (as set forth in Rule 2111 and various Notices to Members, as compiled into a lengthy set of FAQs). And yet, FINRA has said it is ready to begin testing firm’s readiness for Reg BI.