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SEC Chairman Gary Gensler

Regulation and Compliance > Federal Regulation > SEC

No Changes Coming to Reg BI: SEC Chief

By Melanie Waddell

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Gary Gensler, chairman of the Securities and Exchange Commission, said Thursday that the agency is not planning further changes to Regulation Best Interest.

When asked by ThinkAdvisor if the agency would be making any changes to Reg BI, Gensler told reporters during the Investment Adviser Association’s compliance conference, held in Washington, that the SEC has “been examining for and enforcing against” Reg BI, but the agency does “not have it on our agenda.”

Gensler added: “At this juncture, what we’re doing is examining against [the rule], and in some cases bringing enforcement actions, but it’s not part of our regulatory agenda to update” Reg BI.

In follow-up remarks on Reg BI, Gensler stated that while the agency does not plan to update Reg BI, “we proposed something about conflicts and the use of covered technology, data analytics, in this regard,” referring to the agency’s predictive data analytics rule.

“We live in a world now where we’re inundated with behavioral prompts and nudges to do things, and ensuring that investment advisors and broker-dealers continue to put investors first and put their interests behind the investors’ and that those behavorial prompts as well as recommendations and advice don’t shift that,” he explained.

The predictive data analytics rule, intended to address conflicts of interest caused by artificial intelligence and other technology, has received pushback since being proposed last July. It is expected to be finalized this year.

Industry attorneys have said the predictive data analytics rule can be viewed as an indirect expansion of Reg BI.

Melanie Waddell

@Think_MelanieW

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