Best Interest Standard Likely End Of FINRA Suitability Rule
Law360 (May 16, 2019, 9:45 PM EDT) -- Officials at the Financial Industry Regulatory Authority expect to delete the rule requiring broker-dealers to make trades "suitable" to customers if the U.S. Securities and Exchange Commission implements a higher standard known as Regulation Best Interest, a senior FINRA attorney said Thursday.
James Wrona, vice president and associate general counsel at FINRA, said at a conference that the existing rule would likely be mooted by the closely watched SEC proposal. Reg BI would raise the bar set by FINRA's suitability rule. It would require broker-dealers to make decisions in their clients' best interest and disregard most sales incentives that have long been a part...
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