In “SEC Adds More Meat to ‘Retail Standards’ Stew,” BISA Portfolio reported on new rule proposals coming from the Securities and Exchange Commission (SEC). The publication turned to business litigation partner Sandra Grannum for insight on the SEC retail standards bulletin.
Grannum thoroughly reviewed the bulletin in the context of Regulation Best Interest (Reg BI) as it pertains to conduct standards for investment advisers (IAs) while also considering previous guidance connected with related issues, such as when the SEC launched its initiatives aimed at ensuring typical Main Street investors were not steered into more expensive mutual fund share classes. She tracked a “developing convergence” of the Reg BI and IA fiduciary standards as they apply to retail investors.
While the SEC retail standards bulletin does not suggest any updates to Reg BI, it does signal, Grannum explained, that the SEC staff will interpret these two sets of regulations as requiring similar efforts by firms when it comes to managing their conflicts of interest regarding recommendations to retail investors.