ANALYSIS: Goodbye Good Faith Reg BI Compliance Exams

Out with the old, in with the new. No, not the long-awaited farewell to 2020. Rather, financial firms will soon say goodbye to the “good faith efforts” exam standard currently used to evaluate compliance with the SEC’s advice standard package, and hello to tougher examinations in 2021.

On Dec. 21, the SEC announced that Regulation Best Interest (Reg BI) examinations, the package’s centerpiece, will be assessing compliance using a tougher standard starting next month. The Commission makes this change, launching its “next phase” of conducting more focused exams, after reviewing six months of firms’ good faith efforts ...