It is finally here – June 30th is compliance day for Form CRS and Regulation Best Interest – day one! Firms have been working hard to put in place their day one solutions and distribute their Form CRS documents to investors, by mail, and electronically via client portals. Of course, the SEC’s latest regulation, the Regulation Best Interest is about more than “just” creating and distributing the Form CRS – here at La Meer Inc, we have been working hard on creating a full solution for the rest of the requirements. We do cover Form CRS as well if you need a solution there too!
The Regulation Best Interest (known as RegBI) is intended to bring into reality many of the requirements of the now defunct DoL Fiduciary Rule. RegBI falls under the Securities and Exchange Act of 1934, and is intended to establish a standard of conduct for broker-dealers who recommend any securities transaction or investment strategy. The regulation requires broker-dealers to only recommend financial products that are in their customers best interests, and to disclose any potential conflicts of interest and financial incentives the broker-dealer may have with those products. Importantly the regulation affects the whole of the RIA and broker dealer market in the United States, big and small firms must be able to demonstrate that they are acting in their client’s best interest.
As a short reminder, Reg BI mandates four Compliance Obligations:
- Disclosure Obligation: required before, and at the time of recommendation acceptance, and if there are any changes in conditions due to new conflicts or changes.
- Duty of Care Obligation: the exercising reasonable due diligence, care and skill in making recommendations.
- Conflict of interest Obligation: establishing policies and procedures to identify and address conflict of interest.
- Compliance Obligation: establishing policies and procedure to monitor compliance with Reg BI.
In order to be compliant firms must implement the necessary controls and notifications at all stages of the client/sale lifecycle – that includes pre-sales lead generation and management, and investment planning, product sales and advice and post-sale processes as well as, of course, the firm’s compliance and monitoring.
At La Meer, our GRACE for Regulation Best Interest solution covers all of the key requirements to demonstrate compliance:
- Form CRS And Disclosures Management
- Policies and Procedures, Attestation and Training
- Client Relationship Management
- Client Portal
- Client Risk Profile Management and Classification
- Product Governance
- Oversight and Staff Supervision Management
- Conflicts of Interest Monitoring
The modular nature of the GRACE platform allows our clients to implement (and pay for) only the modules or functionality they need, so if you are having a challenge with one particular area of the regulation we can help. The GRACE platform is 21st century technology, cloud-based, web, tablet and mobile-enabled allowing advisors, clients and compliance officers to interact whenever and wherever they are – essential in working from home or with a distributed workforce. The solution is intuitive and easy to use, empowering staff to work in a compliant way, without unnecessary or complex overheads.
If you are working on your whole solution for day two and beyond we would be like to speak with you to understand the challenges you are having, and to discuss with you how GRACE might help you in easing your Regulation Best Interest demands.
About La Meer Inc.
La Meer Inc., founded in 2010, is a Silicon Valley firm that offers the GRACE Suite of products to address a variety of aspects of risk management, from operational risk, compliance management, operational due diligence, client management, KYC, AML, and IT and vendor risk – that address world-wide regulations. Today La Meer is present in the US, Canada, UK and the EU, servicing clients throughout North America and the European Union.
Our team comprises of people with deep subject matter knowledge and technology expertise gained in their extensive global experience, including building and implementing complex systems like the Bombay Stock Exchange on-line trading, credit data warehouse, derivatives technologies, integrated treasury, and corporate and private banking areas. Their experiences include working for major corporations including Citibank, Silicon Valley Bank, and CMC Limited.
GRACE offers comprehensive functionality specifically built to address regulatory needs in the financial segments of banking, asset management, capital markets, and institutional investments. Built on the market leading Oracle stack, availability, reliability, redundancy, resilience, data protection, and data privacy are all inherent in the platform. GRACE’s modular architecture allows firms to have the benefits of a custom solution delivered through configuration of the modules needed to suit their own requirements.
For more information on the product features, please look at our website, or to arrange a demo, feel free to call or email one of our team.
La Meer Inc. A Risk and Compliance Solutions company for Financial Markets. www.lameerinc.com