(Bloomberg News) Structured products are "areas of concern" for the Financial Industry Regulatory Authority, said Richard Ketchum, head of Wall Street's self-funded regulator.

Brokers who sell structured products, which are securities created by banks that package debt with derivatives as customized investment bets, must "truly understand the products they sell," Ketchum said today at the regulator's annual conference in Washington. Sales of structured products rose 46 percent last year to a record $49.5 billion, according to data compiled by Bloomberg.

"Brokers can't rely on firm approval alone to satisfy their suitability obligations," said Ketchum, Finra's chairman and chief executive officer. "This is particularly important with the proliferation of increasingly complex financial products, and at a time when certain investors are tempted to chase yield in today's lower interest rate environment."

Broker-dealers regulated by Finra are currently required to offer products to clients that are "suitable" to their needs. A Securities and Exchange Commission study mandated by the Dodd-Frank Act recommended broker-dealers instead be subject to a fiduciary standard as rigorous as that which requires investment advisers to act in clients' "best interests."

Ketchum, 60, also hinted at future enforcements, saying the regulator would take "a close look at excess charges for routine services which some firms appear to be treating as an additional de facto commission," such as postage and handling for typical trades. "You can expect to see some enforcement activity in this area with respect to particularly egregious examples."

He also said firms' communications with investors need to become easier to understand. "We need to get away from today's environment in which account statements include too much legalistic information," causing investors to ignore them, he said. "That is, to my mind, a fundamentally flawed approach to disclosure."