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Perspectives

Implementing the SEC Regulation Best Interest standard

A summary of resources for navigating Reg BI

On June 30, 2020, the Security and Exchange Commission’s Regulation Best Interest (Reg BI) goes into effect for broker-dealers, registered investment advisers, and dual registrants to enhance the transparency and quality of investors’ relationships. But that’s just the beginning of the journey. This page contains details about available Deloitte resources to help our clients implement the Reg BI rule in their firms.

Background

Reg BI is a new rule under the Securities Exchange Act, establishing a standard of conduct for broker-dealers and natural persons who are associated persons of a broker-dealer when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer. Reg BI imposes a new standard, beyond existing suitability obligations, to act in the best interest of the retail customer at the time a recommendation is made without placing the financial or other interest of the broker-dealers or associated persons ahead of the interest of the retail customers. This includes recommendations of account types, rollovers or transfer of assets, as well as implicit hold recommendations arising from any agreed upon account monitoring arrangement.

While the standard takes effect in late June, that’s just the beginning. We expect that the SEC will issue additional guidance and Deloitte has the capabilities to help firms design and implement Day 2 solutions. Read on.

A study on how wealth management firms are implementing the Reg BI rule package

SIFMA engaged Deloitte & Touche LLP (Deloitte) to facilitate a study of the realized and potential impacts of the Reg BI Rule Package, with a group of 48 SIFMA member firms that provide financial advice and related services to retail investors. Deloitte analyzed data gathered from study participants to identify the compliance decisions and requirements that Firms will likely need to implement to operationalize the Reg BI Rule Package. The firms invited by SIFMA to participate in the study include registered investment advisers, broker-dealers and dual registrants owned by or affiliated with banks, holding companies, insurance companies, and trust companies, as well as independent dual-registered broker-dealers and registered investment advisers.

A firm’s guide to the implementation of Reg BI and the form CRS relationship summary

Read the Securities Industry and Financial Markets Association (SIFMA) guide which aims to assist firms in understanding the various Reg BI and form CRS requirements and their potential impacts. The guide includes recommendations for developing a Reg BI implementation governance program and an outline for and their potential impact on firms.

SIFMA guide

The impact of SEC's new advice standards on broker-dealers and investment advisers

The SEC best interest rule, including forms ADV and CRS, will create a lot of work for registered investment advisors, broker-dealers, and dual registrants. This publication shares tips on how to prepare for compliance.

The impact of SEC's new advice standards

2020 outlook: Navigating a new year of regulatory trends

How can your organization proactively manage—and benefit from—today’s shifting regulatory landscape? Our annual regulatory outlook series provides a forward look at some of the regulatory trends we anticipate will likely have a significant impact on the market and our clients’ businesses in 2020. The issues outlined in each of the reports provide a starting point for an important dialogue about future regulatory challenges and opportunities to help executives stay ahead of evolving requirements and trends. Reg BI is specifically addressed in the capital markets and investment management publications.

2020 regulatory outlooks

Hear from us at an upcoming event

Reg BI implementation challenges for June 30, 2020, and beyond
Listen to a replay and download the slides from this March 2020 webinar.

Reg BI: Compliance progress, deployment challenges, and solution ideas
Listen to a replay and download the slides from this February 2020 Dbriefs webcast.

Reg BI program design: Decisions and challenges
Listen to a replay and download the slides from this December 2019 webinar.

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This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

Deloitte can help

Please let us know if you have interest in learning more about the services that we are actively delivering to help firms prepare for all that lies ahead. Contact a member of our leadership team to discuss your organization’s needs.

Maria Gattuso
Principal
Risk & Financial Advisory
Deloitte & Touche LLP

 

Karl Ehrsam
Principal
Risk & Financial Advisory
Deloitte & Touche LLP

 

George Hanley
Managing director

Risk & Financial Advisory
Deloitte & Touche LLP

 

Bruce Treff
Managing director

Risk & Financial Advisory
Deloitte & Touche LLP

 

Robert Walley
Principal

Risk & Financial Advisory
Deloitte & Touche LLP

 

Gaby Huaman
Managing director

Risk & Financial Advisory
Deloitte & Touche LLP

 

Craig Friedman
Senior manager
Risk & Financial Advisory
Deloitte & Touche LLP

 

Josh Uhl
Senior manager

Risk & Financial Advisory
Deloitte & Touche LLP

 

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