Regulation Best Interest: The Next Big Thing for Broker-Dealer Cross-Border Private Wealth
In April 2018, the U.S. Securities and Exchange Commission ("SEC") released Regulation Best Interest, or Reg BI, a proposed rule that will require broker-dealers to operate in the best interest of their customers. Under Reg BI, broker-dealers must disclose key details of the client-broker relationship; exercise diligence and care when making recommendations to clients; and enforce policies to disclose and mitigate, or eliminate, potential conflicts. However, the proposed regulation, which is back before the SEC for consideration after passing its August 2018 comment period, may create more disruption than it resolves.
This White Paper examines Reg BI and the new and significant challenges it will present to the cross-border private wealth industry.
This White Paper is an expanded version of an article that appeared in the November 2018 edition of Citywire Americas magazine.