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Sunday, November 22, 2020

Reg BI Risk Alerts For Broker-Dealers And Investment Advisers

Forgive us if you’re getting sick of reminders that Reg-BI is not being delayed by the SEC. As Luke wrote this week, the Reg-BI train can’t stop and is arriving soon, and Colin is writing so much about Reg-BI that it’s starting to come out of his ears.

The reception to Reg-BI Optimizer and the E-book guide has been fantastic. Our clients see that we’re not crying wolf, and we’ll continue to bring you updates long after the June 30, 2020 compliance deadline.

Two new Risk Alerts:

Early April, the SEC’s Office of Compliance Inspections and Examinations (OCIE) released two Risk Alerts for Reg BI and Form CRS on April 7, 2020. The Risk Alerts intended to inform broker-dealers and investment advisers about the scope and content of initial examinations after the compliance date of June 30 for Reg BI and Form CRS.

The Director of OCIE said:

“We understand that this implementation will be on the iterative process, and our focus will be on firms continuing good faith and reasonable efforts, including taking into account firm-specific effects from disruptions caused by COVID-19.”

Soon after the OCIE’s release, April 8, the Financial Industry Regulatory Authority (FINRA) indicated in their statement that they will take the same approach described in the SEC Risk Alerts to examine broker-dealers and their associates for compliance with Reg BI. The only slight difference comes in focus to assess whether or not firms have made a “good faith effort to develop and implement procedures and policies reasonably designated to comply with Reg BI and Form CRS.”

As always, FINRA will take action if they find any indications of customer harm or violation of current standards.

Don’t Wait to Become Compliant

It is easy to make errors when updating procedures and documentation processes. The next two months before compliance are essential

I also want to emphasize that RiXtrema stands ready to work with RIA and BD firms to help you reach the Reg-BI and Form CRS requirements by June 30. On our blog, we have many articles on Reg-BI and a CRS Form Checklist.

Click the banner below to schedule a quick demonstration of our Flagship Compliance Software – Reg-BI Optimizer. A top fiduciary law firm, Groome Law Group, reviewed the software for compliance requirements, and it has a step-by-step process to make sure you document and ask the questions required by Reg-BI. 

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