FINRA’s Cook: SEC Reg BI Compliance to Be a Heavy Lift
May 15, 2019 by Melanie Waddell
As the SEC works toward finalizing its Regulation Best Interest proposal for brokers, two issues are front and center for the Financial Industry Regulatory Authority: how to implement the new rule as well as potential changes to the broker-dealer self-regulator’s own rules, FINRA CEO Robert Cook said Wednesday.
“Wherever the SEC lands, it may have implications for our rulebook,” Cook said during a question and answer session at the Institute for Portfolio Alternatives’ annual conference in Washington. “Let’s say that [the SEC] standard incorporates the [FINRA] suitability standard within it; then it seems like it might make sense for us to look at our suitability rule.”
FINRA is also “thinking more generally about are there aspects of our rules that might need to be adjusted/aligned with where the SEC lands,” Cook said. “It’s not surprising because most of the sales practice requirements historically have come from the FINRA rulebook. Reg BI is sort of federalizing sales practice issues.”
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