Regulation Best Interest (BI) is a 2019
Securities and Exchange Commission (SEC)
rule that requires broker-dealers to only recommend
financial products to their customers that are in their
customers best interests, and to clearly identify any
potential conflicts of interest and financial incentives.
The Regulation BI falls
under the Securities
and Exchange Act of 1934 and
establishes a standard of conduct for broker-dealers when
recommending any securities transaction or investment
strategy. To view the SEC rule and interpretations:
SEC Rule - Reg BI
Regulation Best Interest (BI) is a SEC regulation that
attempts to improve safeguards for investors and
standardize conduct of broker-dealers and financial
Similar to the proposed fiduciary rule, BI states that
financial professionals make investment recommendations
that serve the client first and foremost.
Previously, brokers were only held to the “suitability
standard.” This meant that when brokers advised their
clients, they only had to recommend investments that
were suitable, but not necessarily in their clients'
Form CRS - Client Relationship Summary
Broker-dealers will be required to deliver a
relationship summary to retail investors at the beginning of
their relationship. Firms will summarize information about
services, fees and costs, conflicts of interest, legal
standard of conduct, and whether or not the firm and its
financial professionals have disciplinary history. The
relationship summary will have a standardized
question-and-answer format to promote comparison by retail
investors in a way that is distinct from existing
disclosures. The relationship summary will permit the use of
layered disclosure so that investors can more easily access
additional information from the firm about these topics. It
also will highlight the Commission’s investor education
website, Investor.gov, which offers the investing public
educational information, including a series of educational
videos designed to provide ordinary investors with some
basic information about broker-dealers and investment
SEC Regulation BI – Form CRS Delivery
The follow are the procedures we must follow to
comply with Reg BI – Form CRS delivery and proof of such
When do we need to deliver Form CRS:
Any time a new account is opened.
When the financial professional
recommends that the client roll over assets from a
retirement account, including a 401(k) plan, into a
new or existing account or investment.
When the financial professional
recommends or provides a new brokerage service or
investment that does not necessarily involve the
opening of a new account and would not be held in an
Within 30 days of a client’s request
to receive Form CRS.
Within 60 days of the firm making a
material change to Form CRS.
Delivery options – Firm must have proof of
Delivery options for 1-4 above:
Email – Form CRS must be first
Mail – Form CRS must be on the top of
all other documents.
Physically to Client – Form CRS must
be the first document you hand them.
Put on client portal – Form CRS must
be first document uploaded.
Delivery option for 5 above:
The firm will send out Form CRS and
applicable disclosures for any material changes.