SEC Will Begin Examining Compliance With Reg BI After June Implemetation Date

On April 7, 2020, the Office of Compliance Inspections and Examinations (the “OCIE”) of the Securities and Exchange Commission (the “SEC”) issued a Risk Alert to tell broker-dealers that it would begin to examine them for compliance with Regulation BI (Best Interest) (“Reg BI”) after the June 30, 2020, implementation date. This effectively means that the SEC will not extend the deadline for compliance with Reg BI because of the coronavirus. Reg BI requires broker-dealers providing advice on securities to retail customers, meaning individuals and certain family trust representatives, to act in the best interest of such customers and to comply with the Disclosure Obligation, the Care Obligation, the Conflict of Interest Obligation and the Compliance Obligation. They must  must file Form CRS (Client Relationship Summary) and provide it to their retail advice customers.