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 > SEC

Reg BI to Be Folded Into Regular SEC Exams

Your article was successfully shared with the contacts you provided.

What You Need to Know

  • There’s not going to be a Phase 3 of Reg BI exams.
  • Registrants have an understanding of what the SEC expects regarding Reg BI.
  • Advisor exam coverage came in at 16% year to date, higher than the anticipated 15% rate.

The Securities and Exchange Commission will be incorporating compliance with Regulation Best Interest into its regular exams, John Polise, associate director of the SEC’s Broker-Dealer and Exchange Oversight, said Tuesday.

After completing Phase 1 and 2 of Reg BI exams, the “good news is there’s not going to be a Phase 3,” Polise said during the Practising Law Institute’s SEC Speaks event.

However, that doesn’t mean that Reg BI exams are going away.

“What we’re working on now is we have a high level of fluency in our program of using Reg BI and we believe the registrants have an understanding of what we expect regarding Reg BI so we’ll be integrating it into our regular program and regular exams,” Polise said. “You may not get a ‘Reg BI exam,’” he continued, “but you may have Reg BI components in other exams.”

Reg BI, Polise noted, is a “major innovation and major rule change.”

The SEC exam division, Polise stated, “continues to work very closely” with the Financial Industry Regulatory Authority, “which has been an extremely useful partnership in trying to coordinate examinations; make sure we don’t duplicate effort … and make sure that we are consistent in our approach to Reg BI issues.”

Daniel Kahn, acting director of the exam division, stated during the event that the agency has finished more than 3,000 exams in 2021 and that its advisor exam coverage came in at 16%, higher than the anticipated 15% rate.


© 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.