(March 2021)

Brokers, those that are dually-registered, pretty much anyone covered by Reg BI, you should be on the lookout for a pending crackdown by the new Biden administration-led SEC. Industry insiders and former regulators are warning that enforcement of the new Reg BI rule is likely to be strict. Former chief of FINRA, Susan Schroeder, says that enforcement is likely to start soon (i.e. this year) and may be “very aggressive”. According to Schroeder, “Early enforcement actions will be predicated on things like policies and procedures, but by past SEC standards, that is very aggressive”, and if the enforcement actions “are predicated on things like inadequate training or failures to have policies and procedures, from a legal theory perspective, that’s aggressive”.

FINSUM + Magnifi: This is what brokers have been fearing for over a year, and it looks set to happen soon. Many had been hoping for a light focus on Reg BI enforcement because of the meme stock frenzy and the ostensible “threat” of crypto (as the SEC seems to see it), but alas, that now seems it may have been misguided.


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