Regulation Best Interest (Reg BI)
Overview and Resources

The SEC adopted Regulation Best Interest on June 5, 2019 with an effective compliance date of June 30, 2020.   Regulation Best Interest, or “Reg BI”, establishes a “best interest” standard of conduct for both Broker Dealers and their associated persons.  This best interest applies when a recommendation is made to a retail consumer of any securities transaction or investment strategy involving securities.

Reg BI has four main obligations:

  1. Disclosure Obligation
  2. Care Obligation
  3. Conflict of Interest Obligation
  4. Compliance Obligation

Reg BI also introduced a new form, Form CRS, which stands for Customer Relationship Summary.  As the name implies, Form CRS summarizes the relationship with the consumer, discusses fees and conflicts of interest, disciplinary history and other information. 

Overview of Regulatory Best Interest Standards

Introduction to Best Interest Standard – This Proformex video briefly describes what a best interest standard is and why regulators are introducing them.

Best Interest Regulations for Financial Institutions – This Proformex video explains the changing role of financial institutions in light of new best interest regulations.

An In-Depth Look:  Best Interest Standards for Life Insurance – This Proformex Executive Briefing provides a brief history of fiduciary and best interest standards as well as a look at current and emerging standards. 

Introduction to Suitability – This Proformex video describes how New York Regulation 187 requires insurance producers to act in the best interest of consumers and ensure recommendations are suitable.

Overviews of Reg BI

Advisor’s Guide to the SEC’s Final Regulation Best Interest and Form CRS – This is Michael Kitces’ in-depth guide for advisors regarding Reg BI and the newly introduced Form CRS.

Regulation BI, the Short Version – This Barron’s article summarizes the 1,363 pages of Reg BI in a bullet point format.

SEC Regulation Best Interest – In this article, KPMG outlines the key points of Reg BI, briefly discusses the four obligations under Reg BI, and record keeping requirements. 

Regulation Best Interest Rule

Regulation Best Interest, Form CRS and Related Interpretations – This page provide guidance on Reg BI as well as form CRS.  It also includes copies of the final rules and interpretations. 

FAQs on Regulation Best Interest – This article is a set of questions and answers regarding Reg BI.

Implementing Reg BI

Reg BI compliance date remains the same - What does that mean for you?

COVID-19 will not delay Reg BI – Despite pleas from some broker dealers, the SEC announced it would not extend the June 30, 2020 compliance date for Reg BI.

SEC Regulation Best Interest (Reg BI) – This page from FINRA includes resources such as implementation checklists, instructions on filing Form CRS, and reports to help Broker Dealers comply with Reg BI.

Implementing the SEC Regulation Best Interest Standard – The Deloitte page provides a series of articles regarding implementation of Reg BI.