SEC Investment Guidance Appears in Today’s Federal Register, Triggering Effective Dates

Today’s Federal Register contains the Securities and Exchange Commission (SEC) final regulations and accompanying guidance for broker-dealers and advisers who provide certain investment services to retail clients. (See Ascensus’ Washington Pulse for more detailed information.) This official publication triggers effective dates contained in the guidance.

The guidance package was released by the SEC on June 5, 2019, and consists of the following items.

  • Regulation Best Interest, which establishes a standard of conduct for broker-dealers when making recommendations to retail customers
  • A new requirement for investment advisers and broker-dealers to provide a client relationship summary (Form CRS) to retail investors
  • An interpretation of the standard of conduct for investment advisers
  • An interpretation of the “solely incidental” prong of the Investment Advisers Act of 1940 that applies to broker-dealers

The guidance package has multiple effective and compliance dates.

Regulation Best Interest and requirements for use of Form CRS become effective 60 days from today’s publication in the Federal Register: September 10, 2019. There is a transition period until June 30, 2020, to give firms sufficient time to achieve full compliance.

The interpretations under the Advisers Act are effective as of today’s publication in the Federal Register.

Text of the Federal Register guidance is below.

SEC Regulation Best Interest

Form CRS Relationship Summary

SEC Interpretation Regarding Standard of Conduct

SEC Interpretation Regarding “Solely Incidental”