News & Analysis as of

Suitability Rule

UB Greensfelder LLP

Passing The Suitability Buck To The Customer Is Never A Good Strategy

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I continue to wade my way through a few months’ worth of cases, press releases, etc., looking for things that manage to catch my attention. I found this SEC settlement from the end of July involving Integral Financial, a BD...more

UB Greensfelder LLP

The Rare Case Of The Unsuitable Strategy

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As everyone is likely well aware, one of the principal changes that happened when FINRA retired the old suitability rule – NASD Rule 2310 – and replaced it with shiny new FINRA Rule 2111 back in 2012 was the broadening of the...more

UB Greensfelder LLP

Goodbye Suitability, Hello Best Interest. But What Does That Mean, Practically Speaking?

UB Greensfelder LLP on

After having proudly served for decades, and surviving a dramatic face-lift in 2012 (when old NASD Rule 2310 was replaced by shiny new FINRA Rule 2111), it seems that the “suitability rule,” as we’ve come to know it, has, at...more

Dechert LLP

FINRA Moves Forward with Proposed Amendments to its Suitability and Non-Cash Compensation Rules

Dechert LLP on

The Financial Industry Regulatory Authority, Inc. filed proposed amendments with the Securities and Exchange Commission on March 19, 2020, to FINRA Rule 2111 (Suitability Rule) and Capital Acquisition Broker (CAB) Rule 211...more

A&O Shearman

SEC Publishes Frequently Asked Questions on Regulation Best Interest

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On June 5, 2019, the U.S. Securities and Exchange Commission (the “SEC”) adopted Regulation Best Interest (“Regulation BI”) to improve investor protection by establishing a standard of conduct for broker-dealers making...more

Carlton Fields

Suitability Model Crosses the Finish Line

Carlton Fields on

On February 13, 2020, the NAIC Executive Committee adopted revisions to the Suitability in Annuity Transactions Model Regulation (#275) (Revised Suitability Model), which incorporates a best interest standard of conduct for...more

Carlton Fields

NAIC Life Insurance and Annuities (A) Committee Ends 2019 With a Big Bang

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On December 30, 2019, the Life Insurance and Annuities (A) Committee approved a revised Suitability in Annuity Transactions Model Regulation (Revised Suitability Model), ending a flurry of activity over the past year....more

A&O Shearman

Navigating the Co-Existence of Regulation Best Interest and FINRA Rule 2111

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On June 5, 2019, the U.S. Securities and Exchange Commission (SEC) adopted Regulation Best Interest (“Regulation BI”). The goal of Regulation BI is to improve investor protection by: (1) enhancing the obligations that apply...more

UB Greensfelder LLP

FINRA Isn’t Ready To Conduct Readiness Tests For Reg BI

UB Greensfelder LLP on

This post is about Reg BI, but if you really want to learn about it, as opposed simply to listening to me gripe, I urge you to register for the webcast that my partners Heidi VonderHeide and Rob Betman will present on...more

Bass, Berry & Sims PLC

Chris Lazarini Reviews Whether a Rule Violation Supports a Breach of Contract Claim

Bass, Berry & Sims PLC on

Bass, Berry & Sims attorney Chris Lazarini reviewed a putative class case filed against a brokerage firm alleging that the firm breached its client agreement by purchasing risky reverse convertible notes (RCNs) for clients...more

Katten Muchin Rosenman LLP

Corporate & Financial Weekly Digest Featuring Article on FINRA Notice of New SEC Regulation Establishing "Best Interest" Standard...

BROKER-DEALER - FINRA Issues Regulatory Notice Reminding Members of SEC's Adoption of a Best Interest Standard of Conduct - On August 7, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice...more

Carlton Fields

New Chair on the Block Discusses Reconstructing the Suitability Model

Carlton Fields on

Ohio Department of Insurance Director Jillian Froment, the new chair of the Annuity Suitability Working Group (Working Group), invited regulators and interested parties to build the required standard of care foundation for...more

UB Greensfelder LLP

Implicit Recommendations To Hold: FINRA’s Suitability Rule Goes Toe-To-Toe With SEC’s Regulation BI

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Nearly ten years ago, FINRA decided to update its old suitability rule, NASD Rule 2310. It had been around a long time, and while it seemed to work fine, FINRA decided to incorporate into the new amended rule – FINRA Rule...more

Seyfarth Shaw LLP

SEC Imposes New Standard for Broker-Dealer Investment Advice

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On June 5, 2019, the Securities and Exchange Commission (“SEC”) voted to adopt “Regulation Best Interest,” which is intended to increase the duties a broker-dealer owes to its clients. While SEC-registered investment advisors...more

Eversheds Sutherland (US) LLP

The best interest standard under FINRA’s suitability rule

In connection with the US Securities and Exchange Commission’s (SEC) proposed Regulation Best Interest, the Financial Industry Regulatory Authority (FINRA) has asserted (with some case law support from the SEC) that its...more

Carlton Fields

As Students Return to School, Regulators Continue Their Study of the NAIC’s Suitability in Annuity Transaction Model Regulation

Carlton Fields on

At the 2018 NAIC Summer National Meeting, regulators continued their efforts to define the standard of care that applies to recommendations. This subject was discussed at both the Annuity Suitability (A) Working Group...more

Burr & Forman

FINRA Proposes to Remove "Control" as Quantitative Suitability Requirement

Burr & Forman on

FINRA recently proposed to remove the broker’s “control” of a securities account as a required element of a “quantitative suitability” violation under Rule 2111....more

Carlton Fields

New York Department of Financial Services Rings in the New Year with New Suitability Requirements for Insurance Companies

Carlton Fields on

New York’s Department of Financial Services decided to bid farewell to 2017 and ring-in the new year by proposing to amend Suitability in Annuity Transactions, 11 NYCR 224 (the Annuity Suitability Rule). On December 27, 2017,...more

Proskauer - Corporate Defense and Disputes

FINRA Introduces Revised Sanction Guidelines

FINRA recently released updated and revised Sanction Guidelines and an accompanying Regulatory Notice that, among other things, call for stricter penalties against broker-dealers who commit fraud or violate suitability rules....more

Carlton Fields

FINRA: “Fiduciary” Standard Architect?

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FINRA is encouraging broker-dealers (BDs) to act in their customers’ best interests, although the "suitability" standard applicable to BDs does not expressly require it. For example, in 2012, FINRA implemented an...more

Morrison & Foerster LLP

FINRA gives member firms a thumbs up on suitability rule compliance

Morrison & Foerster LLP on

Abstract: Purpose – The purpose of this paper is to interpret Financial Industry Regulatory Authority (FINRA) Regulatory Notice 13-31, which provides practical advice to member firms about how FINRA will be...more

Katten Muchin Rosenman LLP

FINRA Discusses Suitability Rule Examination Findings

The Financial Industry Regulatory Authority, Inc. has released a Regulatory Notice regarding Rule 2111 (Suitability). Regulatory Notice 13-31 does not create or alter existing guidance and interpretations with respect to the...more

Baker Donelson

FINRA Issues Guidance on Suitability Rule for EB-5 Securities Transactions

Baker Donelson on

FINRA has clarified that its Suitability Rule applies to broker dealers' assessment of EB-5 transactions, but that the broker can and should assess the immigration benefit among the economic interests of the investor. ...more

Mintz

FINRA Provides Guidance on the Applicability of the Suitability Rule to Broker-Dealers Marketing Private Placements in the EB-5...

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In an interpretive letter to a broker-dealer dated August 26, 2013, FINRA (Financial Industry Regulatory Authority) interpreted the suitability requirements under Rule 2111 for recommendations to foreign nationals making...more

Katten Muchin Rosenman LLP

Additional Guidance on FINRA's Suitability Rule

In May 2012, the Financial Industry Regulatory Authority provided guidance on Rule 2111 (Suitability) by providing answers to frequently asked questions (FAQs). Answers that supersede some of these FAQs and additional FAQs...more

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