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Key Takeaways from the SEC’s Reg BI Rules Package


Jamie Hopkins - June 12, 2019 - 0 comments

After an almost decade-long wait from the SEC, the commission moved forward rule changes that would expand regulatory responsibilities for brokers to act in the “best interest” of clients when providing investment advice. In addition to the passage of the Regulation Best Interest, the SEC voted in a new client resolution summary (CRS) form, changes to the RIA standard of conduct rules and further clarification of what is “solely incidental” investment advice.

While the rules appear to be a step forward for the SEC, the vote was not unanimous. Detractors, including Commissioner Robert Jackson, argue the new rules add to consumer confusion and do not meet the intended goals of clarifying the difference between broker advice and advice from a fiduciary investment advisor.

SEC Chairman Jay Clayton defended the rule in his opening remarks during the June 5 meeting, arguing that these changes improve consumer protections and make it easier for the SEC to call out bad behavior by those providing investment advice. Still, Clayton acknowledged that the rule changes did not intend to make a consistent rule across brokers and investment advisors. Instead, he noted that while the best interest rules were informed from the fundamentals of fiduciary conduct rules it was not a fiduciary standard.

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