Reg BI
Regulation Best Interest -- SEC rule adopted June 2019, effective June 30, 2020 -- that requires broker-dealers to act in the retail customer's BEST interest at the time a recommendation is made, not merely to recommend a "suitable" product. Raises the bar above FINRA Rule 2111 suitability. The four obligations under Reg BI: disclosure (relationship summary on Form CRS), care (reasonable basis grounded in retail customer's investment profile), conflict-of-interest mitigation, and compliance (written policies). Investment advisers continue to be held to the older fiduciary standard under the Investment Advisers Act, which is stricter still.
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Related terms
Anti-Money-Laundering (AML) · Currency Transaction Report (CTR) · Investment Policy Statement (IPS) · Know Your Client (KYC) · Onboarding Workflow · Politically Exposed Person (PEP)
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