Regulation Best Interest – SEC Observations from Broker-Dealer Examinations
On January 30, 2023, the Division of Examinations of the SEC published a risk alert to raise awareness of the most frequently cited deficiencies and weaknesses observed in recent broker-dealer examinations to assess compliance with Reg BI. The 2023 Risk Alert mainly includes observations related to the four component obligations of Reg BI: Compliance, Care Obligation, Conflict of Interest, and Disclosure.
SEC’s OCIE Risk Alerts – Examination Focus on Compliance with Regulation Best Interest and Form CRS On April 7, 2020, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued two companion risk alerts on compliance with Regulation Best Interest (“Reg. BI”) and Form CRS. These risk alerts provide broker-dealers and investment advisers with advance information about the expected scope and content of the initial examinations for compliance with Reg BI and Form CRS.
Components of Regulation Best Interest
On June 5, 2019, the SEC adopted Regulation Best Interest. The final regulation includes obligations relating to disclosure, care, conflicts of interest and compliance, which are each specific components of the general obligation.