SEC Releases FAQ on Reg BI Compliance
January 14, 2020 by Melanie Waddell
The Securities and Exchange Commission states in a just-released FAQ on Regulation Best Interest that the Customer Relationship Summary, or Form CRS, will not satisfy a broker’s Regulation Best Interest disclosure obligations.
The six-page FAQ released Friday by the agency’s Division of Trading and Markets also clarifies the specific account recommendations covered under Reg BI.
Reg BI and Form CRS have “distinct disclosure delivery obligations” that cannot be satisfied through a hyperlink or other cross reference, according to Cipperman Compliance Services’ note on the FAQ.
Reg BI requires disclosure of “all material facts relating to the scope and terms of the relationship with the retail customer and all material facts relating to conflicts of interest that are associated with the recommendation,” information that likely exceeds Form CRS’ specific requirements, Cipperman quotes the FAQ as stating.
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