Vedder Price

Vedder Thinking | Articles The New Standards for Investor Protection: An Analysis of Regulation Best Interest, Form CRS and Two Interpretations of the US Investment Advisers Act

White Paper

Reader View

On June 5, 2019, the Securities and Exchange Commission (the “SEC”) voted three to one to approve a package of rulemakings and interpretations designed to enhance the quality and transparency of investors’ relationships with investment advisers and broker-dealers (the “June 5 Release”). Adopted pursuant to the broad rulemaking authority granted in Section 913(f) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the June 5 Release consists of the following four components:

1. Regulation Best Interest: The Broker-Dealer Standard of Conduct (“Reg BI”) (Applies to Broker-Dealers; Compliance Date June 30, 2020);

2. Form CRS Relationship Summary; Amendments to Form ADV (“Form CRS”) (Applies to Broker-Dealers and Registered Investment Advisers; Compliance Date June 30, 2020);

3. Commission Interpretation Regarding Standard of Conduct for Investment Advisers (“Fiduciary Interpretation”) (Applies to all Investment Advisers; Effective July 12, 2019); and

4. Commission Interpretation Regarding the Solely Incidental Prong of the Broker-Dealer Exclusion from the Definition of Investment Adviser (“Solely Incidental Interpretation”) (Applies to Broker-Dealers; Effective July 12, 2019).

 

Vedder Price’s Investment Services group created an in-depth white paper that provides guidance to investment advisers and broker-dealers on how to navigate and comply with the rulemakings and interpretations. We also created a one-page overview that focuses on action items that may arise from each component.

 



Professionals



David W. Soden

Associate



Cody J. Vitello

Associate