MyComplianceOffice Blog

A compliance officer's role includes effectively managing conflicts of interest to enhance a firm's conduct culture. One of the ways to do this is a well designed conflict of interest policy that add clarity to the decision process. Below are a few suggestions to ensure that your policy is in good shape for 2020.

Will you be ready to comply with Regulation Best Interest on June 30, 2020? The new rules and interpretations outline requirements instructing broker-dealers and investment advisors to not put their own financial interests ahead of the best interests of retail customers when making recommendations and to address conflicts of interest.

On June 5, 2019, the SEC announced new rules and interpretations clarifying required standards of conduct for broker-dealers and investment advisers when advising retail customers. Firms must be ready to comply with Regulation Best Interest and Form CRS by June 30, 2020.

The FICC Markets Standards Board (FMSB) published the final version of a Statement of Good Practice on the issue of Conflicts of Interest in early October. The guidance is intended to give organizations practical, working level direction and examples to learn from as they determine how to prevent and mitigate conflicts of interest that arise within their enterprises. 

Most people believe if a conflict of interest (COI) arose, they could be fair and objective in responding to it. Research done on the topic shows otherwise, though, especially in the workplace. And even if an employee at a company believes they acted appropriately, it is likely in any given decision their judgment was influenced by a personal interest.