From RIAs and independents to the biggest of the broker-dealers, Broadridge has been keeping a finger on the pulse of preparations and perceptions. Here’s a quick take on what we’ve learned:
RIAs and independents. While the DOL rule was ultimately quashed, it put compliance efforts into motion that are paying off for RIAs and independents today. Levelized compensation, conflict-of-interest mitigation…DOL and Reg BI requirements, while not the same, have much in common. Many of these firms elevated their standard of care for DOL. Most we’ve spoken with are approaching Reg BI with confidence. Their biggest challenge will be Form CRS Day 2 compliance, devising and executing processes and procedures for ensuring timely delivery to prospects and clients.
Broker-Dealers. Broker-dealers didn’t have the same head start. Many have since moved swiftly to prepare for Reg BI. Others have been slower to invest time and resources. There are also those who continue to expect Reg BI to be postponed or cancelled. Not surprisingly then, current levels of preparation among broker-dealers vary. However, most have already updated policies, procedures, fee models, compensation structures and product lists. They’re currently in the process of training their representatives, filing their Form CRS and reviewing distribution plans for Day 1. Day 2 looms larger. Many are in the throes of preparing for reporting, audit response, automation and technology integration, all with an eye toward Day 2 compliance.
SEC and FINRA. On April 2, 2020, Security and Exchange Commission (SEC) Chairman Jay Clayton confirmed that Reg BI requirements and compliance dates will remain in place. Shortly thereafter, the SEC’s Office of Compliance Inspections and Examinations issued Risk Alerts for Reg BI and Form CRS, providing guidance on the substance of upcoming audits and examinations. Both FINRA and the SEC are prepared to conduct examinations remotely. FINRA EVP Bill Wollman reports this shift started well before the pandemic – and will continue as social distancing rules ease. All of this points to regulators’ commitment and ability to enforce Reg BI.
Where do you stand?
Are you ready? Broadridge is currently working closely with RIAs, independents, broker-dealers and regulators to accelerate preparation, automate execution and streamline compliance. To discover how you can step up to Reg BI compliance with greater efficiency and confidence, talk to Broadridge today.
