The SEC’s Office of Compliance Inspections and Examinations (OCIE) plans to conduct exams to determine compliance with new Regulation Best Interest and Form CRS. OCIE announced that the exams will commence soon after the June 30 compliance date. OCIE says that the exams will focus on whether firms have made a “good faith effort” to implement policies and procedures reasonably designed to satisfy Regulation BI and/or implement Form CRS. The Regulation BI exams will review whether broker-dealers satisfied their disclosure and suitability obligations and whether internal operations comply with Regulation BI’s restrictions on conflicts and fee arrangements. The Form CRS exams will assess whether a firm prepared the Form and filed it and whether the form contains the required information including fees and costs and conflicts of interest.
No rest for the weary compli-pros. Just when you thought implementing your Business Continuity Plan during a life-threatening pandemic as the markets gyrated weren’t enough, here comes OCIE to assess your compliance with some new regulations. Well, you can wring your hands about the coming invasion, or you can spend your time preparing the castle for the siege. If you haven’t already drafted Form CRS and required policies and procedures, this may be the time to seek help from your outside lawyer or compliance firm.