April 08, 2022

Sandra Grannum Discusses Regulation Best Interest With PLANADVISER

In “How Thoughts About the SEC’s Regulation Best Interest Have Evolved,” PLANADVISER summarized insights from business litigation partner Sandy Grannum on the U.S. Securities and Exchange Commission’s (SEC) Regulation Best Interest (Reg BI) framework.

After consumer groups, the brokerage industry, various U.S. states and the SEC sparred over Reg BI’s many provisions early on, today, “it’s settled,” Grannum said. “It became enforceable in June 2020, notwithstanding the pandemic. The SEC and FINRA, which said it was going to follow the SEC’s lead on this, both say Reg BI is being enforced.”

Grannum noted that the degree of compliance varies among brokerage firms: Larger firms implemented more training and supervisory practices while smaller firms had been “waiting to see how the tide would flow.”

Grannum also cautioned that activities that initially might not appear to fall under Reg BI still might be included in the regulation’s coverage over time. As an example, she cited SEC concerns over the use of “gamification” in retail investing.

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