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SEC Sets Date for Reg BI, Form CRS Review

Regulatory Agencies

First the Labor Department announced a target for a fiduciary rule redo – and now the Securities and Exchange Commission has announced a review of its Regulation Best Interest.

The SEC has announced a meeting on June 5 where it “…will consider whether to adopt a new rule to establish a standard of conduct for broker-dealers and natural persons who are associated persons of a broker-dealer when making a recommendation to a retail customer of any securities transaction or investment strategy involving securities.” That new rule is, of course, Regulation Best Interest

Also on the agenda: Form CRS Relationship Summary, specifically “…whether to adopt new and amended rules and forms to require registered investment advisers and registered broker-dealers to provide a brief relationship summary to retail investors.”

Other items on the agenda are a Standard of Conduct for Investment Advisers, “…whether to publish a Commission interpretation of the standard of conduct for investment advisers,” and consideration of the “Interpretation of ‘Solely Incidental’” – whether to publish a Commission interpretation of the solely incidental prong of section 202(a)(11)(C) of the Investment Advisers Act of 1940.

Earlier this week, the Labor Department’s updated regulatory agenda confirmed that the agency has set a target date of December 2019 to issue a Notice of Proposed Rulemaking. The agenda explains that the agency is considering its regulatory options in light of the 5th U.S. Circuit Court of Appeals’ ruling (U.S. Chamber of Commerce v. Department of Laborvacating in toto the regulation revising the definition of fiduciary that had been finalized in April 2016.