SEC Adopts Rules and Interpretations Addressing Standards of Conduct for Investment Advisers and Broker-Dealers

SEC Adopts Rules and Interpretations Addressing Standards of Conduct for Investment Advisers and Broker-Dealers


By: Jessica Forbes, Stacey Song, Joanna D. Rosenberg

At an Open Meeting on June 5, 2019, the U.S. Securities and Exchange Commission (the “SEC”) voted on the highly anticipated rulemaking package addressing investment adviser and broker-dealer standards of conduct. The package includes final versions of (i) the SEC's interpretation of the standard of conduct for investment advisers (“Fiduciary Duty Interpretation”), (ii) new rules to require registered investment advisers and registered broker-dealers to provide to retail investors a customer relationship summary (“Form CRS”), (iii) a new rule establishing a standard of conduct for broker-dealers when recommending securities to retail customers (“Regulation Best Interest”), and (iv) the SEC's interpretation of the “solely incidental” prong of the broker-dealer exclusion from the definition of investment adviser in the Investment Advisers Act of 1940 (the “Advisers Act”).

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