Author: Ian Meiksins
In a statement issued by SEC Chairman, Jay Clayton, the SEC announced it will not be extending the compliance date for the implementation of Regulation Best Interest (Reg BI) and Form CRS. The statement said that “because the continued implementation of these conduct and transparency initiatives, individually and collectively, will significantly benefit Main Street investors—we believe that the June 30, 2020 compliance date for Reg BI and other requirements, including the requirement to file and begin delivering Form CRS, remains appropriate.”
Reg BI was originally passed on June 5, 2019, and established a new standard of conduct for broker-dealers when making securities recommendations and providing advice. As part of the final regulation, the SEC now requires all broker-dealers and investment advisors to provide their retail clients with a new disclosure brochure; Form CRS.
Advisors should continue to work on the development of Form CRS and be prepared to file and deliver to all advisory clients by June 30, 2020. Mr. Clayton asserted that OCIE examiners will be reviewing, “…whether firms have made a good faith effort to implement policies and procedures necessary to comply with Reg BI” initially following the implementation date.
A complete look at Reg BI and what RIA’s are required to comply with is available here.