SEC To Expand Scope of Reg BI Exams in 2021
While previous exams looked at 'good faith' efforts by firms to comply, next year the commission will focus on specific rule requirements that 'go beyond suitability standards.'
After gauging firms’ compliance with Regulation Best Interest by ‘good faith’ efforts made since it was implemented earlier this year, the SEC will conduct “more focused examinations” in 2021, according to a statement from the Commission’s Division of Examinations.
“Building on staff’s initial assessments, Division staff intends to expand the scope of examinations in 2021 that focus on specific requirements of the Regulation, including those that go beyond suitability standards and require broker-dealers to have a reasonable basis to believe that recommendations are in retail customers’ best interests,” the statement said. “The Division also intends to conduct enhanced transaction testing designed to examine whether broker-dealers have implemented effectively their written policies and procedures.”