FINRA office in New York. (Photo: Ron Pechtimaldjian) FINRA office in New York. (Photo: Ron Pechtimaldjian)

The Financial Industry Regulatory Authority will not eliminate its suitability rule in light of the Securities and Exchange Commission’s Regulation Best Interest, and plans to submit to its board shortly a rule proposal on sales contests and FINRA’s suitability rule “to conform them to Reg BI,” the broker-dealer regulator’s chief legal officer said Monday.

“We’re not going to get rid” of the suitability rule — Rule 2111 — Bob Colby, FINRA’s chief legal officer, told attendees Monday at the National Society of Compliance Professionals’ annual meeting in Baltimore.

Colby told ThinkAdvisor that he wanted to assure attendees that FINRA’s suitability rule and Reg BI “are not going to be in conflict. They’re very close to begin with.”

FINRA’s suitability rule covers more investors — including institutions — than the SEC’s Reg BI does, Colby told ThinkAdvisor. “I think what we’ll say [in our proposal to the SEC] is if the recommendation is for retail accounts, it’s covered by Reg BI and it will be covered by our suitability rule.”

The goal is to get the proposal before the SEC for approval before Reg BI’s compliance date, which is June 30, 2020.

Colby also said FINRA would be reviewing “not in the same time frame” the two separate FINRA suitability rules that address options and variable annuities.

FINRA recently updated its Reg BI webpage with new Reg BI and Form CRS checklists to help broker-dealers comply with the SEC’s new rules.

FINRA also said that it will be hosting several Reg BI events in the coming months.