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The Rise of a New FINRA Risk & How to Navigate It

Corporate Compliance Insights, The Wealth Advisor

  • June 02, 2023

Sarah Hutchins and Corri Hopkins wrote an article in Corporate Compliance Insights and The Wealth Advisor on broker-dealers facing “increasing risks tied to a 2019 regulation that had previously flown under the radar: Regulation Best Interest — Reg BI for short.”

“Both the SEC and the Financial Industry Regulatory Authority (FINRA) took their first disciplinary actions to enforce the regulation last year,” Sarah and Corri wrote. “In addition, the number of claims customers filed alleging a Reg BI violation surged last year, increasing faster than any other type of FINRA arbitration claim.”

“As regulators and individual investors become increasingly familiar with Reg BI, broker firms should ensure they are following best practices under the new standards,” they continued. “That includes establishing policies and procedures to satisfy Reg BI’s disclosure requirements, conducting annual mandatory employee training related to Reg BI and reevaluating broker compensation models to eliminate conflicts of interest.”

You can read the full article here:

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