Jun 10, 2019 - 4:45pm

Quick Take: Your Primer on SEC's Best Interest Regulations

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The Securities and Exchange Commission headquarters in Washington, D.C.
The Securities and Exchange Commission headquarters in Washington, D.C.

Fill me in:

The Securities and Exchange Commission (SEC) finalized proposals on June 5, 2019, regarding the standards of conduct for broker-dealers and investment advisers. These proposals will require financial professionals to act in the best interest of their clients when providing investment advice.

Why does it matter?

The rules increase investor protection, choice, clarity, and opportunity for all types of investment accounts – from a young investor starting to save for retirement and their future to a family looking to buy their first home or pay for their child’s education. Learn more about different types of investment accounts in these investor profiles.

Number to know:

85%. Following in-depth interviews with 15 companies that provide financial advisory services and products to nearly 78 million investment accounts, 85% said they view “protection for investors” as the most likely benefit of the rules when they were in the proposal stage.

Our take:

“The SEC rules ‘go above and beyond’ to eliminate potential conflicts of interest, including banning sales contest that encourage brokers to sell a certain financial product,” said Samantha DeZur, executive director for capital markets competitiveness at the U.S. Chamber of Commerce. “These rules will protect investors while also preserving their choices to different types of advice.”

What's next?

Broker-dealers and Investment Advisers will have to comply with the majority of the new requirements by June 30, 2022. Additionally, the Department of Labor will follow up with regulatory action. The U.S. Chamber and industry stakeholders will continue to engage with the SEC and DOL throughout finalization and implementation of these landmark regulations.

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Originally published: 10/18/2018. Latest update: 6/10/2019.

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