SEC Adopts Regulation Best Interest And Investment Adviser Conduct Guidance

Author:Mr Richard S. Lincer, Robin M. Bergen, Colin D. Lloyd, Zachary L. Baum, Jim Wintering and Carl F. Emigholz
Profession:Cleary Gottlieb Steen & Hamilton LLP

On June 5, 2019, the Securities and Exchange Commission ("SEC") finalized Regulation Best Interest ("Reg BI" or the "Final Rule") under the Securities Exchange Act of 1934 ("Exchange Act") to establish a new "best interest" standard of conduct for broker-dealers when making a recommendation of any transaction or investment strategy involving securities to a retail customer. The SEC also finalized its interpretation of the fiduciary duty applicable to investment advisers (the "Guidance") under the Investment Advisers Act of 1940 ("Advisers Act") and a disclosure form for investment advisers and broker-dealers to provide to retail investors ("Form CRS"). Finally, the SEC issued an interpretation on the scope of the "solely incidental" prong of the broker-dealer exclusion from...

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