Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Regulation and Compliance > Federal Regulation > FINRA

FINRA Enables Reporting of Reg BI-Related Customer Complaints

Your article was successfully shared with the contacts you provided.

The Financial Industry Regulatory Authority is adding two new “problem codes” when reporting customer complaints related to the Securities and Exchange Commission’s Regulation Best Interest and customer relationship summary, or Form CRS.

The effective date for Reg BI and Form CRS is June 30.

Starting on July 18, firms will be able to use Problem Code 16–Reg BI and new Problem Code 17–Form CRS, when applicable, to report customer complaint information and required documents filed under Rules 4530(f) and (g), FINRA explains in Regulatory Notice 20-17.

FINRA says that the regulator is also retiring Rule 4530 Problem Code 69–DOL Fiduciary Rule and making other non-substantive stylistic changes to the problem codes.

Firms should use Problem Code 16–Reg BI when a reportable matter involves allegations concerning possible violations of Reg BI. “This encompasses allegations that recommendations of securities or investment strategies involving securities, including recommendations of account type, made to retail customers were not in the best interest of the retail customer,” FINRA states.

FINRA says that it’s also revising Problem Code 04–Suitability to help guide broker-dealers’ use of that code after the Reg BI compliance date, “especially considering that the reporting obligation under FINRA Rule 4530(d) and the choice of problem code are based on the alleged activity in the complaint.”

The revised description of Problem Code 04–Suitability explains that, for allegations concerning activity that occurred after the Reg BI compliance date of June 30, firms should consider whether to use Problem Code 16–Reg BI, even if the allegations contain suitability terminology.

Because the Labor Department’s fiduciary rule was vacated by the U.S. Court of Appeals for the Fifth Circuit, FINRA is retiring Problem Code 69–DOL Fiduciary Rule, effective July 18.

Labor sent its new fiduciary rule to align with the Reg BI to the Office of Management and Budget for review on June 2.

Oral arguments were heard on June 2 by the U.S. Court of Appeals for the 2nd Circuit in the case brought against Reg BI by XY Planning Network, seven states and the District of Columbia. A decision is expected before the June 30 compliance date.

— Related on ThinkAdvisor:


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.