SIFMA Regulation Best Interest Vendor Forum – Where Are We Now? (161 days to Implementation!)
Last week, SIFMA hosted a sold-out Reg BI Vendor Forum at its New York Conference Center and Oyster’s consultants attended to receive the most up-to-date information on how our competitors are handling the challenges and client concerns. This was not a conference where regulators explain their expectations, but industry professionals and vendors discussed dealing with various issues under Regulation BI. In some respects, this conference had a “misery loves company” atmosphere.
Included on all panels were the results of a survey conducted by Deloitte as of December 2, 2019. The Survey had 47 firms responding with approximately 80% of the firms being dual registrants.
The program included panels on:
- Business Impact and Strategies for Compliance
- Reg BI Compliance from Front to Back
- Documenting Best Interest, Supervision and Surveillance
Some of the main issues’ firms were struggling with and challenges discussed:
- Meeting the deadline – 46% and 31% were highly to moderately confident, respectively
- Form CRS development, delivery and tracking delivery (47%)
- How long is the delivery of Form CRS good for and when must it be re-delivered?
- Firms eliminating certain products (44%) and changing compensation to FAs (45%),
- What constitutes a “recommendation” requiring the delivery of Form CRS (the “hire me” golf course analogy in the SEC’s FAQs still causing angst.)?
The immediate take-aways from the conference were the importance of training not just registered representatives, but other areas of the firm including Ops, Tech and Finance. Training is required and it is an important way to show regulators your firm’s commitment and effort to meeting the requirements of Reg BI. Also, firms should focus on the higher risk issues and areas such as compensation, conflicts of interest and training. As time goes on your compliance program will evolve and look different down the road than it does on day one.
Oyster has assisted a number of broker-dealers and registered investment advisors with understanding their obligations under Reg BI and can help with training and Form CRS. Oyster provides free resources such as podcasts and blogs, as well a team of consultants and software to help you organize and automate your compliance program. Oyster Consulting has the knowledge and experience to support your efforts to achieve compliance. To receive assistance with the implementation of your Reg BI compliance program, or assistance in understand the impact of these rules, please give us a call at (804) 965-5400 and a Relationship Managers will be glad to connect you with an Oyster expert.
About the Author: Patrick M. Dennis has been involved in the securities industry for over 30 years, most recently as one of the Founding Principals of Oyster Consulting, LLC. Patrick was a Senior Vice President and Assistant General Counsel to Wachovia Securities, LLC (now Wells Fargo Advisors), or its predecessors. Patrick moved to Wells Fargo in 1998, where he was in charge of all litigation and regulatory matters affecting the retail brokerage firm. He managed securities litigation and arbitration matters until 2003 when he moved into a Senior Regulatory Counsel position. In that capacity, he handled a number of high-profile regulatory matters for the firm including, mutual fund breakpoints, mutual fund market timing, inactive fee-based accounts and closed end funds. Patrick also served as Senior Regulatory Counsel to Wachovia’s Investment Advisory line of business.