May 29, 2019

Jim Lundy Discusses the SEC’s Reg BI Meeting and “Solely Incidental” in Fund Intelligence

When the Securities and Exchange Commission (SEC) met on June 5 to vote on the proposed Regulation Best Interest package of rules and interpretations, the agency formally took up and attempted to provide clarity regarding what constitutes “solely incidental” to retail investment advice. In this Fund Intelligence article titled “SEC Revives Debate Over ‘Solely Incidental’ Advice in Reg. BI Vote,” Chicago partner Jim Lundy discussed the numerous questions surrounding the then-proposed Reg. BI package, as well as his predictions for the June 5, 2019, meeting.

Regarding the Commission’s queries to commenters regarding the “solely incidental” issue, Jim said, “They were basically asking for comment regarding certain practices, for example the use of full discretion, temporary or isolated discretion, the use of dual registration status to address these concerns, etc.” He also added, “The commission looks at those comments on those questions and tries to develop some kind of guidance on the issues they raised and the comments that they received.” Jim also noted that certain investor advocacy groups expressed surprise in statements to the financial press that the “solely incidental” topic was listed as a new and distinct agenda item.

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