Marking the first significant enforcement action since implementation of Regulation Best Interest (Reg BI) last year, the Securities and Exchange Commission (SEC) on Monday levied penalties totaling $910,092 across settlements with 21 investment advisers and six broker-dealers for failing to timely file and deliver their client or customer relationship summaries (Form CRS) to retail investors.
Reg BI requires broker-dealers “to act in the best interest of a retail customer” when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer. It’s designed to enhance the broker-dealer standard of conduct beyond existing suitability obligations and make it clear that broker-dealers may not put their financial interests ahead of the interests of a retail customer when making recommendations.
