SEC Regulation Best Interest: A Practical Guide for Broker-Dealers and Investment Advisers

2020 ◽  
Author(s):  
Barry R. Temkin ◽  
Cynthia King ◽  
Mitchell Markarian
Keyword(s):  
Best Interest ◽  
Practical Guide ◽  
Investment Advisers ◽  
Sec Regulation

SEC adopts rules and interpretive guidance designed to enhance and clarify the obligations of financial professionals

2019 ◽  
Vol 20 (4) ◽  
pp. 35-44
Author(s):  
Michael R. Rosella ◽  
Vadim Avdeychik ◽  
Justin R. Capozzi
Keyword(s):  
Historical Context ◽  
Legal Counsel ◽  
Legal Analysis ◽  
Best Interest ◽  
Extensive Experience ◽  
Content Type ◽  
The Us ◽  
Investment Advisers ◽  
Definition Of ◽  
Practical Implications

Purpose This article provides an overview of the US Securities and Exchange Commission’s (SEC) recent approval of a package of rulemakings and interpretations designed to enhance the quality and transparency of investors’ relationships with investment advisers and broker-dealers. Design/Methodology/Approach The article provides legal analysis for and historical context of the requirements of the SEC’s adopted rules, Regulation Best Interest and Form CRS in addition to the two separate interpretations under the Investment Advisers Act of 1940, the Standard of Conduct for Investment Advisers; and the Broker-Dealer Exclusion from the Definition of Investment Adviser. Findings The SEC’s adopted regulatory package does not adopt a uniform fiduciary standard for broker-dealers and investment advisers but instead promulgates legal requirements and mandated disclosures in order to conform to the SEC’s perceived expectations for reasonable investors. Practical implications Investment advisers and broker-dealers should consult with their legal counsel in assessing how and to what extent the new regulatory package is applicable to them. Originality/Value This article provides practical guidance from lawyers who have extensive experience with the Investment Company Act, Investment Advisers Act, and the Securities Acts.

Decoding the SEC rulemaking package on standards of conduct for investment professionals

2018 ◽  
Vol 19 (4) ◽  
pp. 6-12
Author(s):  
Mark M. Attar ◽  
Marguerite Bateman ◽  
Jack P. Drogin ◽  
Domenick Pugliese ◽  
Rachael Leah Schwartz ◽  
...  
Keyword(s):  
Best Interest ◽  
Current Form ◽  
Content Type ◽  
Doing Business ◽  
The Us ◽  
Retail Investors ◽  
Retail Investor ◽  
Standards Of Conduct ◽  
Investment Advisers ◽  
Proposed Regulation

Purpose To provide an overview of the US Securities and Exchange Commission’s (SEC’s) recently proposed rulemaking package relating to standards of conduct for investment professionals. The three proposals included: interpretation regarding the standard of conduct of investment advisers under the Investment Advisers Act of 1940; Form CRS which both registered investment advisers and registered broker-dealers would have to provide to retail investors; and proposed regulation best interest. Design/methodology/approach Reviews and summarizes the three individual proposals. Findings The SEC has proposed this rulemaking package in order to meet three goals: enhance retail investor protection and decision making, preserve investor choice and cost, and raise retail investor awareness of whether they are doing business with a registered financial professional. The SEC is looking for feedback, particularly from retail investors, on whether these proposals would achieve the SEC’s goals. Originality/value Summarizes the three proposals in a manner that provides insight into how investment advisers and broker-dealers would be required to conduct business with retail investors if the proposals are adopted in the current form.

CFTC harmonization rules: CPOs of RICs benefit from “substituted compliance”

2014 ◽  
Vol 15 (1) ◽  
pp. 17-24
Author(s):  
Daphne G. Frydman ◽  
Raymond A. Ramirez
Keyword(s):  
Securities And Exchange Commission ◽  
Futures Trading ◽  
Content Type ◽  
Investment Companies ◽  
Commodity Futures Trading Commission ◽  
Foreign Corporations ◽  
Investment Advisers ◽  
Sec Regulation ◽  
Asset Managers ◽  
Practical Implications

Purpose – To explain regulatory developments and changes to compliance obligations for asset managers registered with the Commodity Futures Trading Commission (CFTC) as commodity pool operators of registered investment companies. Design/methodology/approach – Provides a general overview of new CFTC rules (Harmonization Rules) that afford relief to commodity pool operators of commodity pools that are registered as investment companies under the Investment Company Act of 1940; describes the specific CFTC disclosure, reporting and recordkeeping requirements that remain applicable to commodity pool operators that are also subject to Securities and Exchange Commission (SEC) regulation by virtue of operating commodity pools that are registered investment companies; discusses reliance on substituted compliance with applicable SEC requirements; outlines the method for claiming relief under the Harmonization Rules; provides guidance for CPOs of RICs that use controlled foreign corporations (CFCs). Findings – CPOs of RICs benefit from “substituted compliance” under the CFTC Harmonization Rules. Practical implications – Explains to investment advisers that have registered as CPOs of RICs the disclosure, reporting and recordkeeping obligations that apply to them, how to take advantage of compliance with SEC requirements in lieu of CFTC requirements, and how to claim relief with respect to certain CFTC compliance obligations. Originality/value – Practical explanation by experienced derivatives and securities lawyers.

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