During its first-ever review of compliance with Regulation Best Interest (Reg BI), the Financial Industry Regulatory Authority (FINRA) found significant numbers of broker dealers failing to achieve full compliance. By reporting the most common deficiencies, the agency presents a guide to help industry members focus their due diligence. RumbergerKirk partner Pete Tepley walks us through it.
The SEC’s 2019 adoption of Reg BI, which I wrote about in 2020, imposed a standard of conduct for financial advisers and other broker-dealers, as well as mandating additional transparency for clients. Under the Reg BI standard, broker-dealers and their associated persons (APs) may never place their own or their firm’s financial interests ahead of those of their retail customers.