Reg BI: Brokers, Advisors and the SEC

The SEC recently clarified its stance on the use of the word “advisor” versus “broker” as part of Regulation Best Interest (REG BI) rules that go into effect June 30th, 2020. Unless you are registered as an investment advisor, you will not be able to use the word “advisor” (or “adviser”) in your company name or as a title when dealing with retail clients. As an example of compliance with this rule, Regulus Advisors (the Broker-Dealer) will be shortened to Regulus. If you are using the term “advisor” (or “adviser”) in any of your marketing and do not have the proper registration, you will need to have this adjusted/changed by the compliance date of June 30th.

Reg BI will continue to change the financial landscape as interpretation and enforcement by both FINRA and the SEC moves forward. In order to keep our advisors informed, we will continue to communicate with you via email and by phone. While there have been requests from industry groups to the SEC for delayed implementation, there has been little indication from the SEC that this will occur for anyone other than specific cases of firms hampered by COVID-19. Regulus compliance is continuing to reshape our processes and procedures in order to ensure we are all in compliance by the June 30th deadline.

This is the first of several emails you will see from me in the coming weeks as we prepare our firm for the June 30th deadline. If you have any questions or concerns, please contact the Compliance Team (compliance@regalfin.com). We will be sending timely updates, so please be diligent in the execution/compliance of the regulatory items.

For further resources on Reg BI and the additional impacts it will have on your practice, please see previous communications from Compliance as well as the links below.

The SEC list of frequently asked questions:
https://www.sec.gov/tm/faq-regulation-best-interest33The SEC Regulation Best Interest Compliance Guide:
https://www.sec.gov/info/smallbus/secg/regulation-best-interest22

FINRA overview and resources:
https://www.finra.org/article/regulation-best-interest-%28reg-bi%29-overview

A recent Forbes Article your clients may have seen:
https://www.forbes.com/advisor/investing/regulation-best-interest/

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