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April 27, 2020 at 02:46 PM
As the June 30 compliance date for the Securities and Exchange Commission’s Regulation Best Interest approaches, the agency is reminding broker-dealers when they can, and can’t, use the term “advisor” or “adviser.”
In updated frequently asked questions guidance, the SEC states that the agency “presumes that the use of the terms ‘adviser’ or ‘advisor’ in a name or title by a broker-dealer that is not also registered as an investment adviser is a violation of the requirement to disclose the broker-dealer’s capacity under” Reg BI’s Disclosure Obligation.
That said, the SEC “did not expressly prohibit the use of these names and titles by broker-dealers.”
Broker-dealers, the agency continues, “may use these terms when they are acting in a role specifically defined by federal statute that does not entail providing investment advisory services to retail customers, for example, as a municipal advisor, commodity trading advisor, or advisor to a special entity.”
