Regulation Best Interest and Form CRS: What You Need to Know

Wednesday, February 12, 2020

1:30 p.m. – 3:00 p.m.

Join panelists as they discuss Regulation Best Interest and Form CRS, its impact on the industry and

effective practices to help broker-dealers manage their obligations.

Moderator: Joseph Savage

Vice President and Counsel

FINRA Office of Regulatory Analysis

Speakers: Alicia Goldin

Senior Special Counsel, Office of Chief Counsel, SEC Division of Trading and

Markets

U.S. Securities and Exchange Commission (SEC)

Sheelagh Howett

Chief Risk Officer and Chief Compliance Officer

Cantella & Co., Inc.

Page Pennell

Deputy Chief Compliance Officer

AXA Advisors, LLC

Regulation Best Interest and Form CRS: What You Need to Know Panelist Bios:

Moderator:

Joseph P. Savage is Vice President and Counsel in FINRA’s Office of Regulatory Analysis. Mr. Savage

specializes in a broad range of securities regulatory matters, including investment management,

investment company, advertising and broker-dealer issues, and regularly appears at conferences

regarding these issues. Prior to joining FINRA, he was an Associate Counsel with the Investment

Company Institute and an attorney with the law firms of Morrison & Foerster LLP and Hunton & Williams.

Mr. Savage also served as a judicial law clerk for United States District Judge John P. Vukasin of the

Northern District of California. Mr. Savage holds a bachelor’s degree from the University of Virginia, a

master’s degree in public policy from the University of California, Berkeley, and a J.D. from the University

of California, Hastings College of the Law, where he served as Note Editor of the Hastings Law Journal.

Speakers:

Alicia Goldin is Senior Special Counsel in the Division of Trading and Markets, Office of Chief Counsel,

specializing in broker-dealer sales practices, with a particular focus on issues relating to Regulation Best

Interest, Form CRS, advertising, supervision and arbitration. Ms. Goldin previously served as Counsel to

former SEC Commissioner Elisse B. Walter. Prior to joining the Commission in 2007, Ms. Goldin spent

four years in private practice. She earned her law degree from the University of Michigan Law School

and her undergraduate degree from the University of Virginia.

Sheelagh Howett is Chief Risk Officer and Chief Compliance Officer at Cantella & Co., Inc. She is on

the Board of Directors and shares leadership responsibility with the executive management team for

overseeing the growth and success of the firm. She focuses on keeping clear and regular communication

between business units and compliance within the firm. She strongly believes that risk is an enterprise-

wide responsibility and has created a risk-aware culture including an understanding that risk prevention

is everyone’s job. She continually works to further develop risk-management processes to identify,

assess, and respond to the inevitable risks that face our industry. At the same time, she works to improve

the efficiency and integration of existing processes into daily routines so they become ingrained in the

firm's business. Ms. Howett is a member of the New England Broker/Dealer Investment Advisor

Association, and the Women in Pensions Network. Originally from Ireland, Ms. Howett earned a BA in

Banking and Finance at University College in Dublin. She holds FINRA Series 7 and 24 licenses.

Page Pennell is a 30+ year compliance veteran with experience in retail broker-dealer / investment

advisory firms affiliated with insurance companies, investment companies, banks and wire-houses. He is

currently the Deputy Chief Compliance Officer of Equitable Advisors, affiliate of the AXA-Equitable Life

Insurance Company. Mr. Pennell is regarded as a subject matter expert in the practical application of

regulations, supervisory systems and client suitability. He is a member of the FINRA North Region

Committee as well as other industry committees.

Regulation Best Interest and Form CRS:

What You Need to Know

Panelists

o Moderator

• Joseph Savage, Vice President and Counsel, FINRA Office of

Regulatory Analysis

o Panelists

• Alicia Goldin, Senior Special Counsel, Office of Chief Counsel, SEC

Division of Trading and Markets, U.S. Securities and Exchange

Commission (SEC)

• Sheelagh Howett, Chief Risk Officer and Chief Compliance Officer,

Cantella & Co., Inc.

• Page Pennell, Deputy Chief Compliance Officer, AXA Advisors, LLC

1 The SEC’s Federal Register notices for Reg BI, Form CRS, Interpretation of Solely Incidental and Interpretation of Investment Advisers’ Obligations are available

at https://www.sec.gov/rules/ﬁnal.shtml. The SEC’s Regulation Best Interest, A Small Entity Compliance Guide is available at https://www.sec.gov/info/

smallbus/secg/regulation-best-interest, and Form CRS Relationship Summary; Amendments to Form ADV, A Small Entity Compliance Guide is available at

https://www.sec.gov/info/smallbus/secg/form-crs-relationship-summary.

Reg BI and Form CRS Firm Checklist Compliance Date is June 30, 2020

FINRA is providing this checklist to help members assess their obligations under the SEC’s Regulation

Best Interest (Reg BI) and Form CRS Relationship Summary (Form CRS). This checklist explains key

differences between FINRA rules and Reg BI and Form CRS. The checklist is not a substitute for any rule.

Only the rule can provide deﬁnitive information regarding its requirements. Interpretive questions

should be directed to the SEC, at [email protected]. You should carefully review the SEC’s new

rules and interpretations, related Federal Register notices and the SEC’s Small Entity Compliance Guides,

which provide important information on the new obligations.

REG BI

Do you have procedures and training in place to assess recommendations using a best interest standard?



Status

Completed

✔

Securities recommendations must be in the retail customer’s best interest. The firm and the associated

person (AP) may not place their interests ahead of the retail customer’s. This is a change from FINRA’s

suitability standard, which does not have an explicit best interest requirement. The best interest

standard is an overarching obligation, which is satisfied only if you comply with four component

obligations: Care, Disclosure, Conflict of Interest and Compliance.

Do you apply a best interest standard to recommendations of types of accounts?



Status

Completed

✔

Unlike FINRA’s suitability rule, the best interest standard explicitly applies to recommendations of types

of accounts. A broker-dealer (BD) or AP must have a reasonable basis to believe that a recommendation

of a securities account type (e.g., brokerage or advisory, or among the types of accounts offered by the

firm, including IRAs) is in the retail customer’s best interest at the time of the recommendation and

does not place the financial or other interest of the BD or AP ahead of the interest of the retail customer.

In general, when considering recommendations of types of accounts, you should consider: (a) services

and products provided in the account; (b) projected cost of the account; (c) alternative account types

available; (d) services the retail customer requests; and (e) the retail customer’s investment profile.

With regard to IRAs, in addition to the factors above, you should consider: (a) fees and expenses; (b) level

of services available; (c) ability to take penalty-free withdrawals; (d) application of required minimum

distributions; (e) protections from creditors and legal judgments; (f) holdings of employer stock; and

(g) any special features of the existing account.

Reg BI and Form CRS Firm Checklist 1

Reg BI and Form CRS Firm Checklist 2

REG BI

If you agree to provide account monitoring, do you apply the best interest standard to both explicit

and implicit hold recommendations?



Status

Completed

✔

Reg BI imposes no duty to monitor a customer’s account following a recommendation. However, if you

agree to perform account monitoring services, you are taking on an obligation to review and make

recommendations regarding the account (e.g., to buy, sell or hold) on the specified, periodic basis that

you have agreed to with the retail customer. In such circumstances, Reg BI would apply even where you

remain silent (i.e., an implicit hold recommendation).

For example, if you agree to monitor a retail customer’s account on a quarterly basis, the quarterly

review and resulting recommendation will be subject to Reg BI, including an implicit recommendation

to hold if you are silent as to the securities in the account. In addition, if you agree to monitor the

customer’s account, you are required to disclose the terms of such account monitoring services

(including the scope and frequency of such services) pursuant to the Disclosure Obligation. IA

registration requirements also might apply if a BD agrees to conduct ongoing monitoring in a manner

not reasonably related to providing buy, sell or hold recommendations.

Importantly, you may voluntarily, and without any agreement with your customer, review the holdings

in your retail customer’s account for the purposes of determining whether to provide a recommendation

to the customer. This voluntary review is not considered to be “account monitoring,” and would not

create an implied agreement with the customer to monitor the account.

Do you consider the elements of care, skill and costs when making recommendations to retail

customers?



Status

Completed

✔

Reg BI incorporates FINRA’s reasonable-basis (i.e. knowing the product and having a reasonable

basis to believe it is appropriate for at least some investors) and customer-specific (i.e. knowing

the customer and having a reasonable basis to believe a particular recommendation is appropriate

for a specific customer based on that customer’s investment profile) suitability obligations with

important enhancements.

Care, skill and costs (in addition to applying a best interest standard) are new express elements for

consideration when making recommendations to retail customers.

Cost must always be considered when making a recommendation. Moreover, consideration of cost

includes not only the cost of purchase, but also any costs that may apply to the future sale or exchange

of the security, such as deferred sales charges or liquidation costs. However, while cost must always

be considered, it is not dispositive, and its inclusion in the rule text is not intended to limit or foreclose

a recommendation of a more costly product if there is a reasonable basis to believe that product is in

the best interest of a particular retail customer.

Do you guard against excessive trading, irrespective of whether the BD or AP “controls” the account?



Status

Completed

✔

Reg BI incorporates FINRA’s quantitative suitability obligation (that a series of recommended

transactions are appropriate and not excessive). However, in a change from FINRA’s quantitative

suitability obligation, Reg BI applies the best interest standard to a series of recommended transactions,

irrespective of whether the BD exercises actual or de facto control over a customer’s account.

Reg BI and Form CRS Firm Checklist 3

REG BI

Do you consider reasonably available alternatives to the recommendation?



Status

Completed

✔

You should consider reasonably available alternatives, if any, offered by your BD in determining whether

you have a reasonable basis for making the recommendation. An evaluation of reasonably available

alternatives does not require an evaluation of every possible alternative (including those offered

outside the firm) nor require BDs to recommend one ‘‘best’’ product.

A BD should have a reasonable process for establishing and understanding the scope of such

“reasonably available alternatives” that would be considered by particular APs or groups of APs

(e.g., groups that specialize in particular product lines) in fulfilling the reasonable diligence, care

and skill requirements under the Care Obligation.

Do you consider how to ensure that high-risk or complex products are in a retail customer’s best

interest?



Status

Completed

✔

Although not a rule requirement, BDs should consider, as a best practice, applying heightened scrutiny

as to whether high-risk or complex investments, such as inverse and leveraged ETFs, are in a retail

customer’s best interest.

Prior to or at the time of the recommendation, do you provide retail customers with full and fair

written disclosure of all material facts relating to the scope and terms of the relationship with the

retail customer, including:



Status

Completed

✔



The capacity in which you are acting (BD or IA)?

A standalone BD generally may satisfy this requirement by delivering the Form CRS to the retail

customer.

For BDs who are dually registered, and APs who are either dually registered or who are not

dually registered but only offer BD services through a firm that is dually registered, providing

Form CRS will not be sufficient to disclose their capacity, and they must disclose if they are acting

as a BD when making a recommendation.

In addition, an AP of a dual registrant who does not offer investment advisory services must

disclose that fact as a material limitation. Similarly, an AP registered in a limited capacity

(e.g., a Series 6) must disclose that limitation (i.e., she cannot recommend all available products).



Material fees and costs that apply to the retail customer’s transactions, holdings, and accounts?

This should build upon the fees and costs disclosure in Form CRS, with more particularity, such

as whether fees are deducted from the customer’s account per transaction or quarterly. This

obligation would not require individualized disclosure for each retail customer. Rather, the use

of standardized numerical or other non-individualized disclosure (e.g., reasonable dollar or

percentage ranges) is permissible.

Reg BI and Form CRS Firm Checklist 4

REG BI



The type and scope of services – whether or not the BD will monitor the retail customer’s account

and, if so, the scope and frequency of those services?

Although Form CRS may disclose that the firm provides account monitoring services, Reg BI

requires disclosure about whether or not account monitoring would occur for the particular retail

customer and the scope and frequency of those services.



Any requirements for retail customers to open or maintain an account or establish a relationship

(e.g., minimum account size)?

This would include any requirements for retail customers to open or maintain an account, or to

avoid additional fees when a threshold is crossed, such as a low account balance.



Any material limitations on the securities or investment strategies involving securities that may

be recommended to the customer?

Material limitations include recommending only proprietary products or a specific asset class;

products with third-party arrangements (revenue sharing, mutual fund service fees); products

from a select group of issuers; the fact that IPOs are available only to certain clients; and that

an AP of a dually registered firm does not offer investment advisory services or is registered in

a limited capacity (e.g., Series 6).



The general basis for the recommendation (i.e., what might commonly be described as the firm’s

investment approach, philosophy, or strategy)?

This may be standardized or a summary; however, the disclosure should also address

circumstances when a standardized basis does not apply, and how the BD will notify the

customer when that is the case.

As a best practice, firms should encourage APs to discuss the basis for any particular

recommendation with their retail customers and the associated risks, particularly when the

recommendation is significant to the customer (e.g., the decision to roll over a 401(k) into an IRA).



Risks associated with the recommendation?

Standardized disclosure is permitted.

At or prior to making a recommendation, do you make full and fair written disclosure of all material

facts relating to conflicts of interest?



Status

Completed

✔

Material facts regarding conflicts of interest include, for example: conflicts associated with proprietary

products, payments from third parties and compensation arrangements. BDs must disclose all material

facts relating to conflicts of interest associated with the recommendation. This does not require

that information regarding conflicts be disclosed on a recommendation-by-recommendation basis.

Standardized written disclosure of this information may be made, provided that it sufficiently identifies

the material facts relating to conflicts of interest associated with a particular recommendation.

Reg BI and Form CRS Firm Checklist 5

REG BI

Do you ensure that you do not use the term “advisor” or “adviser” unless you are a registered

investment adviser, a registered municipal advisor, a registered commodity trading advisor or

an advisor to a special entity?



Status

Completed

✔

Use of the terms “advisor” or “adviser” in a name or title by: (a) a BD that is not also an RIA; or (b) a

financial professional that is not a supervised person of an RIA, would presumptively violate Reg BI.

Exceptions would include a BD/AP that acts on behalf of a municipal advisor or commodity trading

advisor, or an advisor to a special entity. In addition, an RR of a dually registered BD may use firm

materials when the BD/IA firm has the term “advisor” or “adviser” in its title.

Do APs supplement written disclosures with subsequent oral disclosure?



Status

Completed

✔

Oral disclosure of a material fact may be required to supplement, clarify or update written disclosure

made previously. BDs must maintain a record that oral disclosure was provided to the retail customer

(but not the substance of the disclosure).

Although not required by Reg BI, the SEC encourages, as a best practice, following oral disclosures with

timely, written disclosure summarizing the information conveyed orally.

Do you have policies and procedures to identify and address the firm’s conflicts of interest?



Status

Completed

✔

Firms must have written policies and procedures reasonably designed to identify and, at a minimum,

disclose or eliminate all conflicts of interest associated with recommendations covered by Reg BI.

A conflict of interest is an interest that might incline a BD or AP – consciously or unconsciously – to

make a recommendation that is not disinterested.

Do you have policies and procedures to identify and mitigate the AP’s conflicts?



Status

Completed

✔

Conflicts that create an incentive for the AP to place the BD’s or AP’s interest ahead of the retail

customer’s interest must be mitigated.

Mitigation measures will depend on the nature and significance of the incentives and a variety of

factors related to a BD’s business model, such as its size and retail customer base, and the complexity

of the security or investment strategy that is being recommended.

Do you have policies and procedures to identify and disclose material limitations on products

recommended?



Status

Completed

✔

Material limitations include, for example, recommending only proprietary products or a specific asset

class; products with third-party arrangements; products from a select group of issuers; or making

IPOs available only to certain clients.

Reg BI and Form CRS Firm Checklist 6

REG BI

Do you have policies and procedures to prevent material limitations from causing the BD or AP to make

recommendations that place the BD’s or AP’s interest ahead of the retail customer’s interest?



Status

Completed

✔

Policies and procedures to prevent harm from material limitations could consist of establishing

product review processes for products that may be recommended, including establishing procedures

for identifying and mitigating the conflicts of interests associated with the product, or declining to

recommend a product where you cannot effectively mitigate the conflict, and identifying which retail

customers would qualify for recommendations from the product menu.

As part of this process, firms may consider: evaluating the use of “preferred lists”; restricting the retail

customers to whom a product may be sold; prescribing minimum knowledge requirements for APs

who may recommend certain products; and conducting periodic product reviews to identify potential

conflicts of interest, whether the measures addressing conflicts are working as intended, and to modify

the mitigation measures or product selection accordingly.

Do you have policies and procedures to identify and eliminate sales contests, bonuses, non-cash

compensation and quotas based on the sale of specific securities or specific types of securities

within a limited time?



Status

Completed

✔

Reg BI bans these practices. This requirement does not apply to compensation practices based on,

for example, total products sold, or asset growth or accumulation, and customer satisfaction.

This requirement would not prevent a BD from offering only proprietary products, placing material

limitations on the menu of products, or incentivizing the sale of such products through its

compensation practices, so long as the incentive is not based on the sale of specific securities or

types of securities within a limited period of time.

The requirement also is not intended to prohibit: training or education meetings, provided that these

meetings are not based on the sale of specific securities or types of securities within a limited period

of time; or receipt of certain employee benefits by statutory employees, as these benefits would not

be considered to be non-cash compensation for purposes of Reg BI.

Have you updated your policies and procedures to ensure compliance with Reg BI?



Status

Completed

✔

Reg BI’s Compliance Obligation requires that BDs establish, maintain and enforce written policies and

procedures reasonably designed to achieve compliance with Reg BI.

In addition to the required policies and procedures, depending on the BD’s size and complexity, a

reasonably designed compliance program generally would also include: controls, remediation of

non-compliance, training, and periodic review and testing.

Firms may be able to satisfy the Compliance Obligation by adjusting their current systems of

supervision and compliance, rather than creating new ones.

Reg BI and Form CRS Firm Checklist 7

REG BI

Have you updated your policies and procedures and systems to ensure Reg BI’s recordkeeping

obligations are satisfied?



Status

Completed

✔

SEA Rules 17a-3(a)(35) and 17a-4(e)(5) codify the recordkeeping requirements associated with Reg BI.

Current recordkeeping practices will not fully satisfy Reg BI. For example, BDs must provide retail

customers with additional disclosures that require records. Firms may use a risk-based approach to

documenting compliance with Reg BI.

Have you implemented training to ensure that APs are aware of Reg BI’s requirements?



Status

Completed

✔

The SEC noted that training generally is an important vehicle to communicate firm culture, specific

requirements of a firm’s code of conduct and its conflicts management framework.

Have you aligned your policies and procedures to the definitions in Reg BI?



Status

Completed

✔



Retail Customer

Reg BI only applies to recommendations to “retail customers.” Reg BI defines a “retail

customer” as a natural person, or the legal representative of such person, who: (a) receives

a recommendation for any securities transaction or investment strategy from a BD or AP;

and (b) uses the recommendation primarily for personal, family or household purposes.



Legal Representative

“Legal representative” includes the non-professional legal representatives of such a natural person,

e.g., a non-professional trustee that represents the assets of a natural person. Reg BI would not

apply when the legal representative is acting in a professional capacity as a regulated financial

services industry professional retained to exercise independent professional judgment. Therefore,

recommendations to registered IAs and BDs or corporate fiduciaries would not trigger Reg BI.

On the other hand, recommendations to non-professional trustees, executors, conservators and

persons holding power of attorney that represent natural persons are covered.



Recommendation

The final rule release for Reg BI states that this is keyed off of the guidance for FINRA’s

suitability rule.



Investment Strategy

The final rule release for Reg BI states that this is keyed off of the guidance for the FINRA’s

suitability rule; however, this will include recommendations of types of accounts.

Reg BI and Form CRS Firm Checklist 8

REG BI



Receives and Uses

The SEC has stated that “use” means when, as a result of the recommendation:

• the retail customer opens a brokerage account with the BD, regardless of whether the BD

receives compensation;

• the retail customer has an existing account with the BD and receives a recommendation

from the BD, regardless of whether the BD receives or will receive compensation, directly

or indirectly, as a result of the recommendation; or

• the BD receives or will receive compensation, directly or indirectly, as a result of that

recommendation, even if that retail customer does not have an account at the ﬁrm.



Personal, Family, or Household Purposes

The phrase “primarily for personal, family, or household purposes” covers any recommendation to

a natural person for his or her account, other than recommendations to a natural person seeking

these services for commercial or business purposes. Reg BI would not cover, for example, an

employee seeking services for an employer or an individual seeking services for a small business

or on behalf of another non-natural person entity, such as a charitable trust.



Conflict of Interest

A conflict of interest is an interest that might incline a BD or AP – consciously or unconsciously –

to make a recommendation that is not disinterested.



Full and Fair

Sufficient information to enable a retail customer to make an informed decision with regard to

a recommendation.

Reg BI and Form CRS Firm Checklist 9

FORM CRS

Have you developed a two-page (four for dual registrants) relationship summary known as Form CRS?



Status

Completed

✔

This applies to both IAs and BDs. Firms must write their relationship summaries in plain language,

taking into consideration retail investors’ level of financial experience. Firms are encouraged, but not

required, to use electronic and graphical formatting.

Does your relationship summary include:



Status

Completed

✔



An introduction to the firm?

This must include: (a) the name of the BD or IA, and whether the firm is registered with the SEC as

a BD, IA or both; (b) an indication that BD and IA services and fees differ and that it is important

for the retail investor to understand the differences; and (c) a statement that free and simple

tools are available to research firms and financial professionals on the SEC’s investment education

website (Investor.gov/sec), which provides educational materials about BDs, IAs and investors.



A description of services and advice that can be provided?

The relationship summary must describe all relationships and services offered to retail investors,

even if the investor at issue does not qualify for or is not being offered a particular service

currently.



A description of fees and costs, applicable standard of conduct, and examples of how the firm

makes money and conflicts of interest?

Firms must summarize the principal fees and costs that retail investors incur with respect to

their BD and IA accounts, and the conflicts they create.



Relevant disciplinary history?

The relationship summary must include a separate section about whether a firm and its financial

professionals have reportable disciplinary history and where investors can conduct further

research on these events.



How additional information may be obtained?

Firms must state where retail investors can find additional information about their BD and

IA services.



Prescribed “conversation starters” for investors to ask?

If a required disclosure or conversation starter is inapplicable to your business, or specific

wording required by the Form’s instructions is inaccurate, you may omit or modify that

disclosure or conversation starter.

Reg BI and Form CRS Firm Checklist 10

FORM CRS

Do you have a process in place to file the Form CRS?



Status

Completed

✔

Firms must file the relationship summary through Web CRD® (dual registrants will be required to file

their relationship summaries using both IARD

and Web CRD®).

Do you have a process in place to update the Form CRS?



Status

Completed

✔

Firms must update Form CRS and file it within 30 days whenever any information becomes materially

inaccurate.

Firms must communicate any changes in the updated relationship summary to retail investors who

are existing clients or customers within 60 days after the updates are required to be made and without

charge. Firms can make the communication by delivering the amended relationship summary or by

communicating the information through another disclosure that is delivered to the retail investor.

Form CRS General Instruction 8 sets forth requirements for updating the relationship summary,

including filing and delivering an exhibit that highlights changes to an updated relationship summary.

Are you delivering Form CRS to each new or prospective customer who is a retail investor before

or at the earliest of:



Status

Completed

✔

(a) a recommendation of an account type, a securities transaction or an investment strategy involving

securities; (b) placing an order for the retail customer; or (c) the opening of a brokerage account for the

retail customer?

If included in a packet of information, the relationship summary must be placed first. If the relationship

summary is delivered electronically, it must be presented prominently in the electronic medium, for

example, as a direct link or in the body of an email or message, and must be easily accessible for retail

investors.

Do you have a process in place to deliver the relationship summary to existing retail customers?



Status

Completed

✔

Firms must deliver the relationship summary to existing retail investor customers before or at the

time firms open a new account that is different from the retail investor’s existing account. In addition,

firms must deliver the relationship summary when they recommend that the retail investor roll over

assets from a retirement account, or when they recommend or provide a new service or investment

outside of a formal account (e.g., variable annuities or a first-time purchase of a direct-sold mutual fund

through a ‘‘check and application’’ process). With respect to existing customers, firms should deliver the

relationship summary in a manner consistent with the firm’s existing arrangement with that customer

and with the SEC’s electronic delivery guidance.

Reg BI and Form CRS Firm Checklist 11

FORM CRS

Are you posting the relationship summary on your public website?



Status

Completed

✔

Firms must post the current version of the relationship summary prominently on your public website,

if you have one. The instructions set forth requirements, including design requirements, for a

relationship summary that is posted on your website.

Have you adjusted your recordkeeping procedures to reflect the relationship summary?



Status

Completed

✔

BDs must make and keep current a record of the date that each relationship summary was provided to

each retail investor, including any relationship summary that was provided before such retail investor

opens an account.

BDs must maintain and preserve, in an easily accessible place, the following records until at least

six years after such record or relationship summary is created: (a) all records of the dates that each

relationship summary was provided to each retail investor, including any relationship summary that

was provided before such retail investor opens an account, as well as (b) a copy of each relationship

summary.

Regulation Best Interest and Form CRS: What You Need to Know

Wednesday, February 12, 2020

1:30 p.m. – 3:00 p.m.

Resources

U.S. Securities and Exchange Commission Resources

Regulation Best Interest

 Securities Exchange Act Release No. 86031 (Regulation Best interest: The Broker-Dealer

Standard of Conduct) (June 5, 2019), 84 FR 33318 (July 12, 2019)

www.govinfo.gov/content/pkg/FR-2019-07-12/pdf/2019-12164.pdf

 Regulation Best Interest Small Entity Compliance Guide

www.sec.gov/info/smallbus/secg/regulation-best-interest#_edn1

 Frequently Asked Questions on Regulation Best Interest

www.sec.gov/tm/faq-regulation-best-interest

Form CRS

 Securities Exchange Act Release No. 86032 (Form CRS Relationship Summary; Amendments

to Form ADV (June 5, 2019), 84 Federal Register 33492 (July 12, 2019)

www.govinfo.gov/content/pkg/FR-2019-07-12/pdf/2019-12376.pdf

 Instructions for Form CRS

www.sec.gov/rules/final/2019/34-86032-appendix-b.pdf

 Form CRS Small Entity Compliance Guide

www.sec.gov/info/smallbus/secg/form-crs-relationship-summary

 Frequently Asked Questions on Form CRS

www.sec.gov/investment/form-crs-faq

Investment Advisers Act Releases

 Investment Advisers Act Release No. 5248 (Commission Interpretation Regarding Standard of

Conduct for Investment Advisers) (June 5, 2019), 84 FR 33669 (July 12, 2019)

www.sec.gov/rules/interp/2019/ia-5248.pdf

 SEC Advisers Act Release No. 5249 (Commission Interpretation Regarding the Solely

Incidental Prong of the Broker-Dealer Exclusion from the Definition of Investment Adviser)

(June 5, 2019), 84 FR 33681 (July 12, 2019)

www.sec.gov/rules/interp/2019/ia-5249.pdf

Other Resources

 FINRA Key Topics Webpage on SEC Regulation Best Interest

www.finra.org/rules-guidance/key-topics/regulation-best-interest

 FINRA Reg BI and Form CRS Firm Checklist (Compliance Date is June 30, 2020)

www.finra.org/sites/default/files/2019-10/reg-bi-checklist.pdf