Los Angeles partner Fred Reish was quoted in a NAPA.net article titled “Will the SEC’s Reg BI Be Challenged in Court?” The article discusses the prospects of a looming legal battle as a result of the SEC’s new investment advice package.

The SEC voted 3-1 on June 5 to put in place a new “best interest” standard of conduct for broker-dealers – the Regulation Best Interest – along with a new Form CRS Relationship Summary and two separate interpretations under the Investment Advisers Act.

The article comments that while state regulators continue to push forward with efforts to strengthen the standards for investment professionals in their states, the SEC’s new guidance declines to stake a claim that Reg BI preempts state laws.

“Since the requirements of Reg BI are considered as too low by consumer groups and by some Democratic state leaders, I believe that more states will enact state fiduciary standards for investment and insurance advice,” Fred said. “There is a perception that Reg BI does not require adequate disclosure of product costs and advisor compensation and does not require that advisors only recommend low cost and high-quality investments and annuities.”
Source: NAPA
Leave Drinker Biddle to Learn More