SEC Adopts Broker-Dealer Best Interest Rule and Disclosure Duties for Broker-Dealers and RIAs, Publishes Key Advisers Act Interpretations

06.11.2019

On June 5, 2019, the U.S. Securities and Exchange Commission (SEC) adopted a package of four regulatory measures focused on retail investors' relationships with investment advisers and broker-dealers. The package includes two new final rules and two interpretations of existing definitions and obligations (click on hyperlinks for full adopting releases):

• New Regulation BI (Regulation Best Interest) 

• New Form CRS (Customer Relationship Summary) 

• Interpretation Regarding the Standard of Conduct for Investment Advisers

• Interpretation Regarding the "Solely Incidental" Prong of the Broker-Dealer Exclusion from the Definition of Investment Adviser 

To read the SEC's press release announcing and summarizing these releases, please click here.  The SEC's proposing releases for these measures received over 6,000 comment letters and resulted in numerous investor and industry meetings. Regardless of the focus on retail investors, every U.S. investor, investment adviser and broker-dealer will be affected by these new measures.  We expect further guidance and interpretation to be provided by the SEC as to the application of these new rules and interpretations, as the financial industry processes their meaning.

Hirschler will provide further analysis of these releases in the near future. In the meantime, please feel free to contact us if you have any questions.