Reg BI Article Published by Oyster Director Evan Rosser

Reg BIIn April 2018, the SEC presented its long awaited rule proposal Regulation Best Interest (“Reg BI”) as a three-part regulatory package aimed at reforming the way that investment professionals serve retail investors. If enacted as proposed, Reg BI would impose upon broker-dealers an obligation to act in a retail customer’s “best interest” when recommending securities transactions or strategies.

In his article “Regulation Best Interest – What it is and What Happens Next”, published in Wolters Kluwer’s online compliance magazine Practical Compliance & Risk Management for the Securities Industry, Oyster Consulting Director Evan Rosser explains the rule and what it does and does not do.

“…there are two specific things that Reg BI does not attempt to do: impose a fiduciary standard on BDs or seek a uniform standard for both BDs and RIAs. Instead, these proposals allow a broker-dealer to meet its “best interest” obligation by fulfilling what are essentially the existing standards for broker-dealer conduct and having reasonably designed policies and procedures to eliminate, or mitigate and disclose the broker-dealer’s competing interests. The “safe harbor” created by complying with the three requirements protects the broker-dealer, not the customer.”

Download the article

 

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