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October 02, 2018 at 11:03 AM
If the Securities and Exchange Commission’s Regulation Best Interest for brokers is finalized, the Financial Industry Regulatory Authority will consider doing away with its suitability rule, Robert Cook, FINRA’s president and CEO, said Tuesday.
“If Reg BI is adopted, then we need to look at our rule set to determine if any changes are appropriate,” Cook said at the Securities Industry and Financial Markets Association’s annual conference in Washington. To “take an obvious one: Do we still need our suitability rule or does it still need to apply to everyone who’s subject to Reg BI? I think that’s the sort of question we would need to look at.”
Depending on what “Reg BI looks like and how it turns out,” Cook said it will be on the broker-dealer self-regulator’s plate “to at least take a look at rules and see if they need adjustment in light of Reg BI.”
Cook also reiterated that part of FINRA’s mandate is to examine for compliance with SEC rules, so with Reg BI FINRA will “look for compliance with that just like we do today with other SEC rules,” noting that FINRA will need to be in touch with “the authors of the rule, the authorized interpreters of the rule” in order to maintain “consistent” compliance outcomes.
As to FINRA’s announcement Monday that it was consolidating its three separate exam programs into a single, unified program, Cook said the 18-month assessment has been a “significant” undertaking.
