Regulatory Update: Regulation Best Interest (“Reg BI”) – effective and compliance dates announced
Regulatory Update: Regulation Best Interest (“Reg BI”) – effective and compliance dates announced
The SEC has published Regulation Best Interest (“Reg BI”) in the Federal Register. Reg BI and Form CRS will become effective on September 10, 2019, with full compliance required by June 30, 2020.
Reg BI establishes an express best interest obligation for broker-dealers (“BDs”). The rule is estimated to become effective in approximately one year. The rule becomes effective 60 days after of being published in the Federal Registered, subject to a transition period until June, 2020.
The rule sets forth a number of obligations for broker-dealers, including:
The Disclosure Obligation
The Care Obligation
The Conflict of Interest Obligation
The Compliance Obligation
Background: Regulation BI was approved by the SEC in a 3 to 1 vote on June 5, 2019. The regulation was first proposed on April 18, 2018, and the SEC collected comments and held hearings on the proposal for the following five months. In a press release issued by the SEC, the Commission said, “Regulation Best Interest will enhance the broker-dealer standard of conduct beyond existing suitability obligations and make it clear that a broker-dealer may not put its financial interests ahead of the interests of a retail customer when making recommendations.”
The SEC has published Regulation Best Interest (“Reg BI”) in the Federal Register. Reg BI and Form CRS will become effective on September 10, 2019, with full compliance required by June 30, 2020.
Reg BI establishes an express best interest obligation for broker-dealers (“BDs”). The rule is estimated to become effective in approximately one year. The rule becomes effective 60 days after of being published in the Federal Registered, subject to a transition period until June, 2020.
The rule sets forth a number of obligations for broker-dealers, including:
The Disclosure Obligation
The Care Obligation
The Conflict of Interest Obligation
The Compliance Obligation
Background: Regulation BI was approved by the SEC in a 3 to 1 vote on June 5, 2019. The regulation was first proposed on April 18, 2018, and the SEC collected comments and held hearings on the proposal for the following five months. In a press release issued by the SEC, the Commission said, “Regulation Best Interest will enhance the broker-dealer standard of conduct beyond existing suitability obligations and make it clear that a broker-dealer may not put its financial interests ahead of the interests of a retail customer when making recommendations.”
