With the new best interest requirements on the horizon, the U.S. Financial Industry Regulatory Authority Inc. (FINRA) is revising its rules.

The U.S. Securities and Exchange Commission’s (SEC) “best interest” standard for broker-dealers and reps when recommending transactions or investment strategies to retail investors — known as Regulation Best Interest (Reg BI) — take effect June 30.

In anticipation of those requirements, FINRA has revised its suitability rule and its rules governing non-cash compensation.

The self-regulatory organization said the changes are intended to address possible inconsistencies between its rules and the new SEC requirements, and to provide the industry with clarity on conduct standards.

For instance, the SEC’s rules will require firms to eliminate sales contests, quotas, bonuses and non-cash compensation based on the sales in a limited time period. FINRA has amended its rules to impose the same restrictions.

The Canadian Securities Administrators (CSA) are adopting their own rules to toughen conduct standards, known as the client-focused reforms (CFRs), which are to be fully implemented by the end of 2021.

It’s expected that the Canadian SROs will also revise their rules to meet the CSA’s requirements on the same timeline.