{"id":6407,"date":"2020-04-13T12:45:43","date_gmt":"2020-04-13T17:45:43","guid":{"rendered":"https:\/\/rixtrema.com\/blog\/?p=6407"},"modified":"2020-05-08T10:39:32","modified_gmt":"2020-05-08T15:39:32","slug":"heres-what-the-sec-is-looking-for-in-its-first-reg-bi-exams","status":"publish","type":"post","link":"https:\/\/rixtrema.com\/blog\/heres-what-the-sec-is-looking-for-in-its-first-reg-bi-exams\/","title":{"rendered":"Here&#8217;s What The SEC Is Looking For In It&#8217;s First Reg-BI Exams"},"content":{"rendered":"\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<ul class=\"wp-block-list\"><li><a href=\"#1\">The SEC is sympathetic to COVID-19 efforts<\/a><\/li><li><a href=\"#2\">Is your firm ready to show a good-faith effort?<\/a><\/li><li><a href=\"#3\">Don&#8217;t forget these critical compliance steps<\/a><\/li><li><a href=\"#4\">What is the CRS Form?<\/a><\/li><li><a href=\"#5\">Rixtrema&#8217;s Reg-BI Optimizer<\/a><\/li><\/ul>\n\n\n\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Even though markets are focused on the impacts of COVID-19, the SEC is not looking to a delay of Reg-BI,<\/span><a href=\"https:\/\/rixtrema.com\/blog\/reg-bi-isnt-delayed-because-of-covid-19\/\"> <span style=\"font-weight: 400;\">as I wrote previously<\/span><\/a><span style=\"font-weight: 400;\">. With less than 3 months remaining until RIAs and Broker-dealers are on the hook for new compliance, it is time for them to get in gear. Fear not, though. This article has insights into what the SEC is trying to determine in their initial compliance exams.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"1\"><strong>The SEC is sympathetic to COVID-19 efforts<\/strong><\/h2>\n\n\n\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The Commission sees that the big firms who manage the majority of retail investor assets have &#8220;<\/span><a href=\"https:\/\/www.thinkadvisor.com\/2020\/04\/07\/sec-releases-exam-schedules-for-reg-bi-form-crs\/?kw=SEC%20Releases%20Exam%20Schedules%20for%20Reg%20BI%2C%20Form%20CRS&amp;utm_source=email&amp;utm_medium=enl&amp;utm_campaign=breakingnewsalert&amp;utm_content=20200407&amp;utm_term=tadv\"><span style=\"font-weight: 400;\">made considerable progress<\/span><\/a><span style=\"font-weight: 400;\">&#8221; towards reaching compliance. Small, independent advisory firms are a different story, though.&nbsp;<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">A firm may be behind the compliance deadline if it is not doing the following:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Analyzing how to adjust business practices;<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">supplement and modify policies and procedures; and<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">aligning your workflows to prepare for compliance with Reg BI and Form CRS.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"2\"><strong>Is your firm ready to show a good-faith effort?<\/strong><\/h2>\n\n\n\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">First, Reg-BI exams will determine whether a BD or RIA has made a &#8220;<\/span><a href=\"https:\/\/www.thinkadvisor.com\/2020\/04\/07\/sec-releases-exam-schedules-for-reg-bi-form-crs\/?kw=SEC%20Releases%20Exam%20Schedules%20for%20Reg%20BI%2C%20Form%20CRS&amp;utm_source=email&amp;utm_medium=enl&amp;utm_campaign=breakingnewsalert&amp;utm_content=20200407&amp;utm_term=tadv\"><span style=\"font-weight: 400;\">good-faith effort<\/span><\/a><span style=\"font-weight: 400;\"> to implement policies and procedures designed to comply with Reg-BI and be effective.&#8221; Beginning June 30th, 2020, the SEC will want documentation and proof that each recommendation an RIA or BD makes is within its &#8220;Best Interest&#8221; guidelines. In essence, you can read more about what a<\/span><a href=\"https:\/\/rixtrema.com\/blog\/what-is-best-interest-anyway\/\"> <span style=\"font-weight: 400;\">&#8220;Best Interest&#8221; recommendation is on our blog<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The Commission will look for the same in their assessment of Form CRS filings. They will &#8220;review the filing and posting of the firm&#8217;s relationship summary as well as its process for delivering the relationship summary to existing and new retail investors.&#8221; The Office of Compliance Inspections and Examinations (OCIE) will most likely review filings that occur during the first year after the compliance date. Still, they will be looking for evidence of compliance beginning at the June 30<\/span><span style=\"font-weight: 400;\">th<\/span><span style=\"font-weight: 400;\"> deadline.&nbsp;&nbsp;<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">As their<\/span><a href=\"https:\/\/www.sec.gov\/files\/Risk%20Alert-%20Regulation%20Best%20Interest%20Exams.pdf\"> <span style=\"font-weight: 400;\">April Announcement outlined<\/span><\/a><span style=\"font-weight: 400;\">, the OCIE will be evaluating each RIA and Broker-Dealer to the standards unique to their firm. Not every document listed in the announcement will apply to every firm.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"3\"><strong>Don&#8217;t forget these critical compliance steps:<\/strong><\/h2>\n\n\n\n<ul>\n<li style=\"font-weight: 400; text-align: justify;\"><span style=\"font-weight: 400;\">Deliver Form CRS to retail customers in a &#8220;brief customer or client relationship summary that provides information about the firm.&#8221;<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\"><span style=\"font-weight: 400;\">File Initial CRS Forms and amendments with the Commission using the Central Registration Depository (&#8220;Web CRD&#8221;) or Investment Advisor Registration Depository (&#8220;IARD&#8221;)<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\"><span style=\"font-weight: 400;\">Post the most current CRS Form on the firm&#8217;s public website, if the firm has one.<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"4\"><strong>What is the CRS Form?<\/strong><\/h2>\n\n\n\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">If this is the first time you&#8217;ve read about a Customer Relationship Summary (CRS Form), then don&#8217;t worry. We reviewed the<\/span><a href=\"https:\/\/www.sec.gov\/rules\/final\/2019\/34-86032.pdf\"> <span style=\"font-weight: 400;\">SEC&#8217;s 500-page description<\/span><\/a><span style=\"font-weight: 400;\"> and prepared a quick checklist in addition to our comprehensive Reg-BI compliance guide.<\/span><\/p>\n<p><a href=\"https:\/\/rixtrema.com\/blog\/client-relationship-summary-crs-form-checklist\/\"><span style=\"font-weight: 400;\">Click here to get our CRS Form Checklist.<\/span><\/a><\/p>\n<p><a href=\"https:\/\/rixtrema.com\/preview-Reg-BI.pdf\"><span style=\"font-weight: 400;\">Click here to get our comprehensive Reg-BI mini-ebook.<\/span><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"5\"><strong>Rixtrema&#8217;s Reg-BI Optimizer<\/strong><\/h2>\n\n\n\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Since the January launch, many advisors are finding that RiXtrema&#8217;s Reg-BI optimizer meets the SEC&#8217;s Reg-BI expectations and helps optimize processes to ensure proper documentation. This finding is consistent with top ERISA attorneys who are experts in pension regulatory law. Groome Law reviewed RiXtrema&#8217;s product before it launched and found that it met all the SEC&#8217;s expectations.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The compliance software comes with an administrator panel for Compliance Officers. The admin panel alerts officers if a BD or RIA misses a step or forgets to fill in any part of the Reg-BI Best-Interest requirements.\u00a0<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">You can read more about Reg-BI Optimizer on our<\/span><a href=\"https:\/\/rixtrema.com\/blog\/proving-compliance-with-regbi-optimizer\/\"> <span style=\"font-weight: 400;\">blog<\/span><\/a><span style=\"font-weight: 400;\">. Visit our website:<\/span><a href=\"https:\/\/rixtrema.com\/\"> <span style=\"font-weight: 400;\">https:\/\/rixtrema.com\/<\/span><\/a><span style=\"font-weight: 400;\"> to learn more about any of RiXtrema&#8217;s financial planning, risk, or compliance software products. You can also contact the Client Success Team at <\/span><span style=\"font-weight: 400;\">clientsuccess@rixtrema.com<\/span><span style=\"font-weight: 400;\">.<\/span><span style=\"font-weight: 400;\"> They can guide you through a quick demonstration of how Reg-BI Optimizer can prepare a firm to become compliant and ready to show the SEC proof when they come knocking later this year.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/rixtrema.net\/regbioptimizer\/index?source=Colin-13-04\" target=\"_blank\" rel=\"noopener noreferrer\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"120\" src=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2020\/04\/Reg-BI-Optimizer-download-banner-min.png\" alt=\"\" class=\"wp-image-6451\" srcset=\"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2020\/04\/Reg-BI-Optimizer-download-banner-min.png 600w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2020\/04\/Reg-BI-Optimizer-download-banner-min-300x60.png 300w, https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2020\/04\/Reg-BI-Optimizer-download-banner-min-500x100.png 500w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>The SEC is sympathetic to COVID-19 efforts Is your firm ready to show a good-faith effort? Don&#8217;t forget these critical compliance steps What is the CRS Form? Rixtrema&#8217;s Reg-BI Optimizer Even though markets are focused on the impacts of COVID-19, the SEC is not looking to a delay of Reg-BI, as I wrote previously. With&#8230; <\/p>\n<div class=\"clear\"><\/div>\n<p><a href=\"https:\/\/rixtrema.com\/blog\/heres-what-the-sec-is-looking-for-in-its-first-reg-bi-exams\/\" class=\"excerpt-read-more newsstand-button\">Read More<\/a><\/p>\n","protected":false},"author":9,"featured_media":6409,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[300],"tags":[317,1282,277],"class_list":["post-6407","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-regulation-best-interest","tag-covid-19","tag-reg-bi-optimizer","tag-regulation-best-interest"],"jetpack_featured_media_url":"https:\/\/rixtrema.com\/blog\/wp-content\/uploads\/2020\/04\/reg-bi-min.png","yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v15.9.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Here&#039;s What The SEC Is Looking For In It&#039;s First Reg-BI Exams<\/title>\n<meta name=\"description\" content=\"Even though markets are focused on the impacts of COVID-19, the SEC is not looking to a delay of Reg-BI, as I wrote previously. 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