Regulation Best Interest – Is Your Firm Ready?

The SEC voted on June 5th 2019 to approve a set of proposals setting new conduct standards for broker-dealers. Regulation Best Interest (“Reg BI”) is part of a package of rules and interpretive guidance directing broker-dealers to act in the “best interest” of their clients. The package also includes new compliance requirements and guidance for both broker-dealers and investment advisers concerning the new obligations owed to retail investors.

DEADLINE INFORMATION:

The adoption of Reg BI by the SEC marks the start of a very short compliance implementation phase. The SEC stated that the interpretative guidance will be effective upon publication in the Federal Register. (The rules and forms will be effective 60 days later.) Broker-dealers must begin complying with the new rule, and broker-dealers and investment advisers must prepare, deliver to investors, and file the customer relationship summary by June 30, 2020.

HOW BATES CAN HELP:

Bates Group’s compliance consultants can help your firm through the implementation phase of Reg BI. We help you navigate:

• Disclosure obligations
• Duty of care obligations
• Conflicts of interest obligations
• Additional compliance obligations

Bates can also assist you with:

• Developing the new Reg BI Client Relationship Summary (“CRS”) for retail investors
• Navigating additional compliance requirements for BDs and IAs
• Understanding new SEC guidance concerning the “Solely Incidental” registration exemption of the Investment Advisers Act

Additional Bates compliance solutions include:

• Impact and readiness assessments
• Conflicts of interest inventory
• Conflicts of interest assessment
• Product shelf reviews
• New product approval processes
• Draft new policies and procedures
• Data capture and recordkeeping