On May 22, Brett Redfearn, the Director of the Securities and Exchange Commission’s Division of Trading and Markets spoke at the Financial Industry Regulatory Authority’s Annual Conference regarding the newly proposed Regulation Best Interest. (For a more complete discussion of Regulation Best Interest, please refer to Katten’s “SEC Proposes Fiduciary Rule for Broker-Dealers” advisory, available here.) Director Redfearn noted that he views Regulation Best Interest as a “significant change from the status quo for broker-dealers that provide advice” that builds upon current regulations. He further noted that Regulation Best Interest tries to achieve two goals: (1) enhancing the quality of broker-dealer recommendations to retail customers; and (2) preserving the “pay as you go” model as a viable choice for investors seeking recommendations about securities.
In addition to noting the goals of Regulation Best Interest, Director Redfearn outlined some of the key aspects of the proposal, including the contours of the “best interest” standard. He concluded his remarks by encouraging market participants to submit comments to the numerous questions posed in the proposal. The 90-day comment period for Regulation Best Interest ends on August 7.
The text of Director Redfearn’s remarks are available here.