Compliance Newsflash –August 14, 2019

August 15, 2019

FINRA Pledges Resources to Support Members’ SEC Reg BI Compliance

On August 9, 2019, Plan Advisor reported that FINRA has issued a regulatory notice to its members to remind them of the Securities and Exchange Commission’s (SEC) adoption of Regulation Best Interest (Reg BI) and the related requirement to furnish clients with a customer relationship summary, dubbed Form CRS. FINRA notes that the SEC encourages firms to actively engage with the SEC staff as early as possible as compliance questions arise. A staff committee with representatives from the SEC’s Division of Investment Management, Division of Trading and Markets, Division of Economic and Risk Analysis, Office of Compliance Inspections and Examinations, and Office of the General Counsel has been established to assist firms with compliance.

For more information, click here.

OCIE Risk Alert Regarding Adviser Examination Observations from the Supervision Initiative

On August 13, 2019, JDSupra reported that the staff of the SEC’s Office of Compliance Inspections and Examinations (Staff) issued a Risk Alert on July 23, 2019, in which the Staff shared observations from its “Supervision Initiative” that “assess[ed] the oversight practices of SEC-registered investment advisers” (advisers) involving persons “with a history of disciplinary events” and other legal actions.1 According to the Risk Alert, OCIE identified advisers to examine in part through the advisers’ public disclosures in Form ADV, and the Staff examined more than 50 advisers in 2017, where the “vast majority” of clients were retail investors. 

For more information, click here.