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June 06, 2019 at 02:26 AM
Members of the U.S. Securities and Exchange Commission voted 3-1 Wednesday to approve the SEC’s Regulation Best Interest: The Broker-Dealer Standard of Conduct (Regulation BI).
The SEC has posted a 771-page regulation packet for Regulation BI, which is set to have a compliance date of June 30, 2020.
The SEC also agreed to update its customer relationship summary (CRS) form to reflect the Reg BI changes, and to issue instructions on how registered investment advisors should interpret their fiduciary duty requirements.
The SEC began working on the Reg BI project after the U.S. Department of Labor began to have problems with implementing its own fiduciary rule regulations. The new standard requires broker-dealers to act in investors’ best interest when making investment recommendations.
Groups representing the securities industry and financial planners have started to weigh in.
(Related: Cheers, Jeers for SEC’s New Advice-Standards Rules)
The Securities Industry and Financial Markets Associations says the new regulations appear to be tough.
The Financial Planning Association says the Reg BI best-interest standard falls short of what a fiduciary rule would provide.
Here’s what four major life and annuity groups are saying.
American Council of Life Insurers (ACLI)
ACLI President Susan Neely put out a statement praising Reg BI.
“Reg BI strikes the right note — arming people with the information they need to make good purchasing decisions while safeguarding their access to a broad selection of solutions to secure their retirement,” Neely said in the statement. “Protecting consumers does not mean limiting their choice of products and services.”
Neely believes the Reg BI is more sensible and sustainable than the Labor Department’s fiduciary rule, according to the ACLI.
Neely said the ACLI would like to see the SEC continue to work with the National Association of Insurance Commissioners and the Labor Department on a harmonized and uniform standard of care for investment advice.
