In an article published in the Journal of Financial Compliance, Partner Stephanie Nicolas and Associate Joshua Nathanson discusses the differences between Reg BI and the Advisers Act fiduciary standard, general considerations regarding the scope and application of Reg BI and recent guidance and enforcement actions related to the care obligation, among other topics
Excerpt: “Reg BI is codified in Rule 15l-1 under the Securities Exchange Act of 1934 Reg BI contains a ‘general obligation’ that is satisfied if and only if a broker-dealer complies with four component obligations: the care obligation, the disclosure obligation, the conflict of interest obligation, and the compliance obligation. Crucially, Reg BI applies only if certain triggers are satisfied. Specifically, there must be a ‘recommendation’ to a ‘retail customer.’ An effective compliance programme will be attentive to Reg BI triggers so that natural person APs comply with Reg BI whenever Reg BI is operative.”
