FINRA’s New And Improved Fund Analyzer Tool

FINRA’s New And Improved Fund Analyzer Tool

FINRA has recently given us all a new and improved Fund Analyzer tool. With the recent emphasis on Share Class selection, Regulation Best Interest (Reg BI) for broker-dealers, and the fiduciary duty of Registered Investment Advisers. Firms are encouraged to train their staff on using this new tool.

The new analyzer allows individuals to sort through and compare more than 30,000 products and run a wide variety of investment scenarios. The tool’s enhancements enable users to better calculate how a fund’s fees, expenses, and discounts impact the value of a fund over time.

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Regulators Focus on Reg BI During 2021 Audits

Regulators Focus on Reg BI During 2021 Audits

The Securities and Exchange Commission adopted a new rule under the Securities Exchange Act of 1934 that established a standard of conduct for broker-dealers and the natural persons who are associated persons of a broker-dealer. It was established to enhance the broker-dealer’s standard of conduct to retail customers beyond the existing suitability obligation.

This standard of conduct takes critical principles from the underlying fiduciary obligations under the Investment Advisers Act of 1940. The SEC’s focus was regardless of whether a retail investor chooses a broker-dealer or an investment adviser, all retail investors should be entitled to a recommendation (by a broker-dealer) or advice (by an investment adviser) given in the best interest of the retail investor. It is essential to recognize that the term “retail investor” also includes Accredited Investors.

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Reg BI

Regulation Best Interest: Examination Focus Areas

Last month, the SEC’s Office of Compliance Inspections and Examinations (OCIE) issued a Risk Alert regarding examinations that will focus on broker-dealers’ compliance with Regulation Best Interest. The SEC wanted to make clear that the Regulation Best Interest compliance date of June 30, 2020 will not be extended. The OCIE will begin examinations with the program and will continue to add this element as part of exams for one year after the implementation date.

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Form CRS

Form CRS: Initial Examination Guidance

The June 30th compliance deadline for Regulation Best Interest and Form CRS is quickly approaching. It presents new compliance requirements for broker-dealers and investment advisers engaging in a retail business.

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Examinations and Risk Monitoring

Examination and Risk Monitoring: What to Expect in 2020

FINRA recently released a podcast called “What to Expect: The 2020 Exam and Risk Monitoring Program“. It provides a wealth of information from three members of the Member Supervision Senior Leadership on what to expect from the Examination and Risk Monitoring program in 2020. Here are a few highlights from the podcast. Read More…

Change to New York IAR Registration

Regulation Best Interest and CRS Relationship Summary

In June, the U.S. Securities and Exchange Commission (SEC) passed “Regulation Best Interest: The Broker Dealer Standard of Conduct” and “Form CRS Relationship Summary; Amendments to Form ADV”. This legislation, Regulation Best Interest and CRS Relationship Summary, is the cumulation of many attempts to mesh the “fiduciary standard” for Investment Advisers and Broker-Dealer Representatives. The objective of this legislation and its requirements are to educate investors through disclosures regarding any conflicts, fees, costs, and whether the investment opportunities being offered are suitable for the investor. This legislation will impose new documentation requirements for both Investment Advisors and Broker-Dealer Representatives.

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