Regulation Best Interest Exams Among Top Exam Priorities for 2021

Posted on February 11th, 2021 at 11:12 AM
Regulation Best Interest Exams Among Top Exam Priorities for 2021

From the Desk of Jim Eccleston at Eccleston Law LLC:

The Financial Industry Regulatory Authority (FINRA) expects real progress in compliance policies and procedures around Regulation Best Interest.  FINRA’s 2021 goal is to expand the scope of Regulation Best Interest and Form CRS reviews and testing. The current changes attempt to create a more comprehensive review of firm processes, practices, and conduct.

FINRA's exam team will conduct more thorough reviews of how firms handle Regulation Best Interest and the new relationship summary document known as Form CRS. FINRA has outlined several other areas of concern, such as how firms are handling cybersecurity, variable annuities, and anti-money laundering programs. FINRA also warns of potential compliance issues that could come from novel digital communications.

FINRA also added a new item to its exam priorities list: Outside Business Activities (OBA) and Private Securities Transactions. FINRA has come across instances when registered representatives have received loans for an outside business activity under the federal Paycheck Protection Program (PPP) but had not previously disclosed those activities to their respective firms.

FINRA also expects firms to pivot their focus from monitoring for compliance to identifying gaps or lapses. FINRA’s new Form CRS is a reader-friendly document with an interactive format that firms can use to bolster their compliance programs. Firms should use the Form CRS as a roadmap to the resources they expect to devote to their compliance programs.

Eccleston Law LLC represents financial advisors nationwide. Please contact us to discuss any issues that you may have.

Tags: eccleston, finra, regulation, eccleston law

Return to Archive



Hiring Eccleston Law has been one of the best career decisions I have made and this "investment" to maintain my sterling regulatory record has been returned many times over.  If you are in a situation where you've been unfairly accused, don't hesitate to talk with Eccleston Law. They are the best.

Thomas C.


September 20, 2023
SEC Orders Legendary Capital Founder and REIT Advisors to Pay Nearly $5 Million

Corey Maple, co-founder of non-traded REIT sponsor Legendary Capital, has agreed to a $100,000 civil penalty to settle charges brought by the Securities and Exchange Commission (SEC).

September 19, 2023
Reg BI Violations Lead to FINRA's Fine on Another Broker-Dealer

The Financial Industry Regulatory Authority (FINRA) has fined and censured broker-dealer Network 1 Financial Securities and its chief compliance officer for violating Regulation Best Interest (Reg BI).

September 18, 2023
Troubles at an Arizona Park Funded by Municipal Bonds Are a Warning to Investors

The recent financial troubles at a sports arena in Mesa, Arizona, demonstrate that not all municipal bonds are equally safe.