Compliance Solutions

SEC Regulation Best Interest

SEC Regulation Best Interest (Reg BI) compliance is an expansive regulatory challenge that impacts the fundamental business structure of financial services organizations as it creates new regulatory and compliance risks. The development of core Reg BI compliance and supervisory components will help firms address the burden of compliance departments in the broker-dealer industry.

SEC Regulation Best Interest, approved by the SEC on June 5, 2019, includes proposals setting new conduct standards for broker-dealers. To ensure Reg BI compliance, broker-dealers must adhere to  a package of rules and interpretive guidance directing them 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.

 

Reg BI Compliance Deadline Information

The adoption of SEC Regulation Best Interest marks the start of a very short implementation phase for firms to ensure Reg BI compliance. 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, prepare, deliver to investors, and file the customer relationship summary by June 30, 2020.

 

How Bates Compliance Can Help:

Our Reg BI compliance consultants can help your firm through the implementation phase of SEC Regulation Best Interest. We help you navigate:
  • Disclosure obligations
  • Duty of care obligations
  • Conflicts of interest obligations
  • Additional compliance obligations
We can also assist you with:
  • Developing the new Reg BI Client Relationship Summary (“Form 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
  • Impact and readiness assessments
  • Conflicts of interest inventory
  • Conflicts of interest assessment
  • Product shelf reviews
  • New product approval processes
  • Drafting new policies and procedures
  • Data capture and recordkeeping
  • Training for compliance and sales professionals

REG BI COUNTDOWN – HERE’S WHAT YOU SHOULD BE WORKING ON NOW:

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Our Bates Compliance team can guide you to compliance with SEC Regulation Best Interest (Reg BI).

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