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March 26, 2019 at 02:07 PM
The Financial Industry Regulatory Authority, as the enforcer of the Securities and Exchange Commission’s upcoming Regulation Best Interest, will either revamp its current suitability rule once Reg BI is final or eliminate it, Robert Colby, FINRA’s chief legal officer, said Tuesday.
“There’s a lot of overlap between the existing suitability rule and the direction that Reg BI is going in order to mitigate conflicts,” Colby said during a regulatory panel discussion at the Securities Industry and Financial Markets Association’s annual compliance event in Phoenix.
After Reg BI is finalized, FINRA will “look to see first, is there anything different between our [suitability] rule and the way it [Reg BI] comes out? We’ll fix that,” Colby said. “We’ll also look to see if there’s any reason to continue to have a separate suitability rule, because we’ll be enforcing Reg BI and we don’t want to be inconsistent in any way.”
If FINRA decides to keep its suitability rule, “we want to make sure they are completely aligned,” Colby said.
Brett Redfearn, director of the SEC’s Division of Trading and Markets, stated on the panel with Colby that Reg BI continues to be a priority for the agency.
“Reg BI is a very high priority because it’s an important rule,” Redfearn said, as it will “heightened the current broker-dealer rules for standards of conduct.”
