Updated September 1, 2023, at 9:25 AM
The Regulation Best Interest, or Reg BI, effective date was June 30, 2020.
As financial professionals and advisors continue to dip their toes in the new compliance-laden waters, the question is still swirling around: What is Reg BI?
What is Reg BI?
The Reg BI summary directly from the Financial Industry Regulatory Authority (FINRA) website states:
The SEC’s Regulation Best Interest (Reg BI) under the Securities Exchange Act of 1934 establishes a “best interest” standard of conduct for broker-dealers and associated persons when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities, including recommendations of types of accounts.FINRA.org
The Reg BI infographic below outlines what Reg BI is and some of the more frequently asked questions about the new standard. To dive deeper into FINRA’s Reg BI standard, get our FINRA Reg BI checklist infographic. It details 20 compliance requirements your firm will need to follow to become fully compliant.