On April 2 the SEC issued a statement indicating that despite the disruption of the COVID-19 pandemic, the June 30, 2020 deadline for Regulation Best Interest (Reg BI) would not be deferred.
According to the statement, “Over 57 million American households are invested in our securities markets. The interests of these individuals—our long-term Main Street investors—are the lens through which we evaluate whether we are effectively advancing the SEC’s mission. The 4,500 women and men of the SEC are committed to these investors and the integrity of our markets. The uncertainties caused by COVID-19 have not changed our perspective or commitment.”
What does this mean for the broker dealers and investment advisors impacted by Reg BI?
Firms must be ready to prove to regulators that they are ready to comply with Reg BI even as they work to conduct business as usual in the climate of flux and uncertainty brought by the COVID-19 pandemic.
The statement notes that during the initial period following the June 30 deadline, SEC examiners will focus on whether firms have made a “good faith” effort to implement the policies and procedures necessary to comply with Reg BI.
The SEC is expected to issue two additional Risk Alerts with additional information in the near future. The first alert will give broker-dealers specific information about the scope and content of initial examinations for Reg BI. The second will provide broker-dealers and investment advisors with similar information about Form CRS.
We have resources that can help.
Join us for a webinar on April 15 with Paul Murdock and Gus Macedo from MCG Consulting featuring practical guidance on what broker dealers and investment advisors need to know right now to be ready for the June 30 deadline, including insight on the latest SEC statements.
To learn about the basics of Reg BI and Form CRS watch our on-demand webinar featuring Carl Seiler, JD, Managing Director of Blue River Partners.
And if you're looking for compliance solutions to help your organization manage conflicts of interest, learn more about how MyComplianceOffice can help. If you're ready to talk with us, let us know and one of our experts will be in touch.