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FINRA will Defer to SEC on Interpreting Best Interest Rule

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Originally posted on InvestmentNews by Mark Schoeff Jr.

When a new investment advice standard for brokers is implemented next June, Finra will be responsible for examining brokers for compliance. But the Securities and Exchange Commission will make the final call on determining how the regulation will work.

“It’s not our rule. It’s an SEC rule,” Finra chief executive Robert W. Cook told state regulators on Monday at the North American Securities Administrators Association annual conference in Austin, Tex.

Mr. Cook said the Financial Industry Regulatory Authority Inc. often conducts examinations on SEC rules. On Reg BI, the broker regulator needs “to develop a really good process with the SEC” to handle questions that will come up during exams, he said.

Read the full article on InvestmentNews.

Dan Moisand

 

Dan Moisand is a nationally recognized fiduciary fee-only financial planner, an Institute Real Fiduciary™ Advisor and Chair-elect of the CFP Board.

The Institute has enshrined the ‘Moisand Rule’ on fiduciary practices. It is basic and is more important today than ever: “You have to avoid conflicts. If I avoid a conflict, I don’t worry about it.”

Watch the video of Moisand speaking here.

Bob Veres

 

Bob Veres is a long term observer of financial planning. His Newsletter, “Inside information” Is a staple of leading planners. In the May edition he writes about fiduciary and the Institute.

"But a much bigger point is that the fiduciary standard—as Knut Rostad of the Institute for the Fiduciary Standard has pointed out—has been determined by the Supreme Court (1963 ruling) to be at the very heart of the Investment Advisers Act of 1940. It is the foundation of what it means to be an RIA registered with the SEC instead of a tipster or a tout."

- Bob Veres, Parting Thoughts ... The SEC's Own Compliance Culture