Regulation Best Interest: First Analysis

Summary

This article discusses the Regulation Best Interest (Regulation BI) adopted by the U.S. Securities and Exchange Commission (the Commission or SEC) on June 5, 2019, culminating a multi-year consideration of commentary, reports, rulemaking, interpretations, and guidance and changing the landscape for how retail investors will interact with their broker dealer financial services providers. It also adopted new guidance that aims to clarify the applicable standards of care of investment advisers. The new rules standardize and implement additional disclosure obligations required of broker-dealers when dealing with retail customers. Simultaneously, the new guidance provides a description of investment advisers’ fiduciary duties that effectively seeks to harmonize that existing standard with the new standards for broker-dealers set forth in Regulation BI.