Reg BI Compliance and “Reasonably Available Alternatives”

FINRA and the SEC have both indicated a greater level of scrutiny and higher level of expectation of compliance with Regulation Best Interest. Of note is their focus on the Care Obligation requirement that representatives assess “reasonably available alternatives” when making a recommendation. Regulators will expect firms to have a process for assessing their product… READ MORE

FINRA’s 2021 Cybersecurity Focus

Since FINRA began publishing its annual examination priorities letter in 2006, each year cybersecurity and the protection of customer information have been identified as a top priority. The 2021 Report on FINRA’s Examination and Risk Monitoring Programs is no exception. As evidence of its concerns about cybersecurity risk, FINRA has hired a number of individuals… READ MORE

SEC Outlines Path to Digital Asset Custody for Broker-Dealers

On December 23, 2020, the SEC issued a request for comment regarding the application of the Customer Protection Rule to digital asset securities. With the request for comment, the SEC also issued a statement indicating that, if a broker-dealer operates under specific circumstances set out in the statement, it would not seek enforcement action on… READ MORE

5 Things to Know about Remote Branch Inspections

In a much-anticipated notice, FINRA announced the implementation of the temporary guidance allowing firms the ability to conduct branch office inspections on a remote basis. While this is a big relief for compliance officers wondering how they were going to complete branch inspections in a period of safety concerns and social distancing, it is important… READ MORE

Variable Annuities – Still Under the Regulatory Microscope

Recent FINRA settlements make clear that regulators continue to see the sales and supervision of variable annuities as a priority, especially when it comes to switches or exchanges between products. Because of their complexity and costs, firms must ensure that recommendations of variable annuities are suitable for (and now in the best interest of) clients,… READ MORE

5 Common Compliance Mistakes

When I was a regulator, we would meet each week to discuss the cases being considered for Enforcement referrals. It was surprising how often the same types of cases would come before us. These were not always headline grabbing, but they were avoidable items that came up over and over again. I thought it might… READ MORE