Shearman & Sterling LLP | FinReg | <span ><font >US Securities and Exchange Commission Proposes Broker-Dealer Standard of Care and Guidance on Investment Advisers’ Fiduciary Standard</font ></span >
Financial Regulatory Developments Focus
This links to the home page
Financial Regulatory Developments Focus
FILTERS
RECENT POSTS
UK Regulators Consult on Digital Securities Sandbox
Bank of England Consults on Revisions to Statement of Policy on Enforcement
UK Conduct Regulator Proposes Payment Optionality for Investment Research

  • US Securities and Exchange Commission Proposes Broker-Dealer Standard of Care and Guidance on Investment Advisers’ Fiduciary Standard
    04/18/2018

    The U.S. Securities and Exchange Commission published three proposed rules with request for public comment that would seek to enhance and clarify the standards of care applicable to broker-dealers and investment advisers when dealing with retail clients. The three proposals are designed to be interlocked and complementary, and, as noted by SEC Chairman Jay Clayton in his introduction of the proposals, are aimed, in part, at better aligning regulations and obligations of broker-dealers and investment advisers with the expectations of retail investors, and preserving retail investor choice. The first proposal, which introduces a new Form CRS relationship summary, will require broker-dealers and investment advisers to provide a relationship summary (limited to a maximum of four pages) to investors that captures certain information through the use of newly proposed Form CRS, and place restrictions on the use of certain names and titles, such as “adviser” and “advisor,” for firms and financial professionals. The second proposal seeks to implement Regulation Best Interest under the Securities Exchange Act of 1934, and would establish a standard of conduct applicable to broker-dealers when making a recommendation of a securities transaction to a retail customer. Finally, the third proposal clarifies the standard of conduct for investment advisers, and request comments with respect to enhancing investment adviser regulation under the Investment Advisers Act of 1940, including requesting comment regarding the licensing of investment adviser personnel and capital requirements for investment advisers. Comments to each of the proposals are due 90 days from each respective proposal’s publication in the Federal Register.

    View more detailed discussion of the proposals.

    View     full text of the Form CRS proposal.

    View full text of the Regulation Best Interest proposal.

    View full text of the investment adviser proposal.
    TOPIC: Securities