05.15.20
FINRA Clarifies Sales Contest Restrictions for Proposal to Align Suitability, Reg BI
by: Mark, Jr. Schoeff
FINRA has revised a rule proposal for aligning its current broker advice standard with the SEC's Regulation Best Interest (Reg BI) by clarifying that sales contests involving mutual funds and variable annuities are okay as long as non-cash compensation is based on total sales and equal weighting of sales among products. “It is not FINRA's intent to propose changes to its non-cash compensation rules that would prohibit sales contests, sales quotas, bonuses, or non-cash compensation that are permissible under Reg BI,” Joseph Savage, FINRA vice president and counsel, wrote in a May 13 letter responding to comments received on the proposal. “FINRA cautions members, however, not to conclude that any sales contest that awards non-cash compensation for sales of securities within particular product categories is per se permissible under Reg BI.”
Read the full article on InvestmentNews