Investment News – Mark Schoeff Jr.
When a new investment advice standard for brokers is implemented next June, Finra will be responsible for examining brokers for compliance. But the Securities and Exchange Commission will make the final call on determining how the regulation will work.
Mr. Cook said the Financial Industry Regulatory Authority Inc. often conducts examinations on SEC rules. On Reg BI, the broker regulator needs “to develop a really good process with the SEC” to handle questions that will come up during exams, he said.
“I don’t want us to be interpreting the rule,” Mr. Cook said.
Mr. Cook said Finra is working with the SEC on exam modules and examiner training in preparation for the June 30, 2020, implementation date.
In June, the SEC approved a regulatory package that centers on Regulation Best Interest, a measure designed to raise the broker advice requirement above the current suitability standard. Suitability is a Finra rule, and many elements of it have been incorporated within Reg BI.
Under Reg BI, Finra will have to review its own rulebook. The regulator could keep parts of the suitability rule and modify other parts.