Leadership of an organization can have a direct impact on the group’s culture, outlook, and practices. Changes in leadership structure can result in changes in any of these areas. As a result, it is a good idea for broker-dealers to keep apprised of such changes within the organization that writes and enforces the rules governing their profession.
What leadership changes are happening within FINRA?
The Financial Industry Regulatory Authority (FINRA) recently announced changes within some key leadership roles. These changes include FINRA’s recent appointment of Bill St. Louis as Executive President of National Cause and Financial Crimes Detection Program (NCFC) and current Executive Vice President Greg Ruppert taking on FINRA’s Member Supervision Program.
What is the NCFC?
The NCFC is responsible for investigating allegations of money laundering, fraud, and cybersecurity violations as well as high-risk representatives. Mr. St. Louis has stated he will take an aggressive approach to find those who fail to abide by the group’s rules. That he will “ensure FINRA is on the front lines fighting fraud and swiftly identifying and removing bad actors from the industry.”
What about the Member Supervision Program?
Mr. Ruppert has a wide range of experience, including former work with the Federal Bureau of Investigation (FBI) as well as Schwab. FINRA CEO Robert Cook has stated that he expects Mr. Ruppert to continue previous Member Supervision leader Bari’s work, in particular with oversight of firms and a focus on continuing to move the transformation that was already in place forward.
What does this mean? For starters, a continued focus on SEC Regulation Best Interest (Reg BI).
What is Reg BI?
Reg BI establishes a “best interest” standard of conduct for broker-dealers. It applies whenever they make a recommendation to a client for a securities transaction or investment strategy and basically increases the expectations and requirements around how the broker establishes that their work is in the best interest of their client.