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January 31, 2023

Sandra Grannum Discusses Reg BI Compliance With FundFire

In “SEC Warns Industry About Deficiencies in Reg BI Compliance,” FundFire turned to business litigation partner Sandra Grannum for her commentary on the United States Securities and Exchange Commission (SEC)’s latest efforts to tighten up Regulation Best Interest (Reg BI) compliance in the industry.

Grannum explained that due to the COVID-19 pandemic, the SEC did not enforce the rule in 2020 but made it clear that it was including Reg BI into broker-dealer examinations and would consider enforcement actions. “This [risk alert] is basically like a third strike. They’re giving [the industry] an opportunity to fix it. This is the time to make sure you’re in order,” she explained.

“For some of these smaller houses, they may have waited too long because they wanted to see how things were panning out, and also it’s an expensive process,” Grannum said. “Now they’re at the point where the SEC might be asking them for documents and… bringing suit against them… if they find they breached Reg BI. Later in the year, we may see disciplinary actions filed against certain people, or settlements,” she added.

The full article is available for FundFire subscribers.

Full Article

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