FINRA Plans Major Rule Review in Wake of Reg BI

The second phase, which would likely come in “several iterations,” Cook said, “may be a wider scope of inquiry on what are the rules that were adopted in the absence of a best-interest standard that maybe we should revisit now that there’s a best interest standard.”

Now that there’s an “overarching [best-interest] duty” under Reg BI, “maybe there are certain elements of our rulebook that should be changed, deleted, enhanced,” Cook said.

He welcomed attendees to nominate rules for review. “The door’s open for that type of input.”

As to the consolidation of FINRA’s three exam programs, which the broker-dealer self-regulator started last October, “the major changes are still to come,” Cook said. “2020 is going to be the year of implementation of a new exam program where first, it’s one integrated program, [that’s] based on business model of firm; so each firm will be tracked through their business model.”

Examiners, Cook said, will be “organized around that business model,” and there will be “a single point of accountability for risk management and exam oversight.”