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Reg BI and Form CRS updates

April 8, 2020
Volume 14


  • Information Notice
  • UPC Advisory

Upcoming Deadlines and Effective Dates
  • FINRA Requests for Comment
  • SEC Request for Comment on FINRA Rules

Education and Compliance Programs

Reg BI and Form CRS update. On April 7, the SEC’s Office of Compliance Inspections and Examinations (OCIE) released Risk Alerts for Reg BI and Form CRS. These Risk Alerts set forth OCIE’s expectations for firms’ compliance with Reg BI and Form CRS and provide broker-dealers with information about the scope and content of OCIE’s initial examinations following the compliance date of June 30, 2020. FINRA will take the same approach as set forth in the SEC Risk Alerts when FINRA examines broker-dealers and their associated persons for compliance with Reg BI and Form CRS.

Read FINRA’s full statement.


FINRA publishes Reg BI preparedness paper. As part of FINRA’s continuing efforts to assist members with the implementation of Reg BI and Form CRS, FINRA has published a new report highlighting common practices FINRA observed during reviews that began in late 2019 and through ongoing conversations with firms of all sizes about their preparedness initiatives. The report is meant to help FINRA member firms assess their efforts against their peers.

For more information on Reg BI and Form CRS, visit FINRA’s website.


FINRA is committed to providing guidance, updates and other information to help stakeholders stay informed about the latest COVID-19 developments. This week, FINRA:

  • Gave small firms (identified as having no more than 150 registered persons) additional time to pay the Gross Income Assessment and the Personnel Assessment. See the FAQ for additional information on the timeline and net capital treatment of deferred payments.
  • Provided additional temporary relief to member firms in five new frequently asked questions. Topics addressed include: CE regulatory element deadlines, late filing fees for forms U4/U5, delivery of form U5 to terminated individuals, and the net capital treatment of covered loans under the CARES Act. The relief provided does not extend beyond the identified rules and requirements.
  • Continued to compile State “Shelter-in-Place” and “Stay-at-Home” Orders to aid member firms.

FINRA will continue to consider additional relief or adjustments as appropriate. For all of FINRA’s latest COVID-19 updates and answers to frequently asked questions, visit FINRA’s website.


Members of the U.S. Subgroup of the Intermarket Surveillance Group Announce the Establishment of the Cross-Market Regulatory Working Group

FINRA is issuing Information Notice 4/8/20 to inform members of the existence and role of the Cross-Market Regulatory Working Group (CMRWG), which was established under the U.S. Subgroup of the Intermarket Surveillance Group (ISG), to focus on ways to reduce unnecessary regulatory duplication.

UPC Advisory

The following UPC Advisory was published in the last week:

  • UPC #09-20: RAIT Financial Trust (RASFQ, RASGQ, RASJQ, RASLQ, RFTTQ, RFTZQ)

 Upcoming Deadlines and Effective Dates

FINRA Requests for Comment

FINRA’s Capital Acquisition Broker (CAB) rules provide a simplified rulebook for broker-dealers that engage only in limited capital advisory, corporate restructuring and private placement activities. FINRA is requesting comment on proposed amendments to the CAB rules, as described in Regulatory Notice 20-04, to make them more useful to CABs without reducing investor protection. The comment period has been extended to May 15, 2020.

FINRA is requesting comment on a proposal to implement the recommendations of the CE Council regarding enhancements to the continuing education requirements for securities industry professionals. The proposal, described in Regulatory Notice 20-05, would change the: (1) Regulatory Element to provide annual training, make the content more relevant, incorporate diverse instructional formats, publicize the learning topics in advance and enhance the related management systems; (2) Firm Element to expressly recognize other training requirements, improve the guidance and resources available to firms and establish a content catalog; and (3) Continuing Education Program to enable individuals who terminate their registrations the option of maintaining their qualification by completing continuing education. The comment period has been extended to May 31, 2020.

SEC Request for Comment on FINRA Rules

The SEC requests comment on FINRA’s proposed rule change to, among other things: (1) amend the FINRA and Capital Acquisition Broker (“CAB”) suitability rules to state that the rules do not apply to recommendations subject to Regulation Best Interest (“Reg BI”); and (2) conform the rules governing non-cash compensation to Reg BI’s limitations on sales contests, sales quotas, bonuses and non-cash compensation. The comment period expires April 15, 2020. See the Federal Register notice.


 Education and Compliance Programs

The recording of the latest Small Firm Conference Call is now available for FINRA members. On the call, Robert Cook and Senior Vice President of Member Relations and Education Chip Jones were joined by FINRA senior leaders to discuss updates and implications of COVID-19.

Registration is open for the 2020 Small Firm Conference. The event will be held on November 11–12 in Santa Monica, California, and will bring together FINRA staff and industry peers for in-depth discussions on small firms' practices. Register early to receive discounted registration rates!

Save the Date for these upcoming FINRA events:

  • FINRA Institute at Georgetown Certified Regulatory and Compliance Professional® Program – Week I | July 19–24, 2020 | Washington, DC
  • FINRA Institute at Georgetown Certified Regulatory and Compliance Professional® Program – Week II | November 15–20, 2020 | Washington, DC

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