SEC headquarters in Washington.(Photo: AP)

On June 5, 2019, the Securities and Exchange Commission (SEC)adopted a rulemaking package that is applicable to investmentadvisers and broker-dealers. The package includes two final rulesand two interpretations: Regulation Best Interest, InvestmentAdviser Standard of Conduct Interpretation, Form CRS — RelationshipSummary, and the Solely Incidental Broker-Dealer ExclusionInterpretation. This is the first in a series of articlesdescribing the SEC’s rulemaking package.

The Regulation Best Interest final rule (Reg BI)under the Securities Exchange Act of 1934 established a standard ofconduct for broker-dealers and their registered representatives.Reg BI requires that broker-dealers act intheir retail customers’ best interest when making investment orinvestment strategy recommendations.

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