At an Open Meeting on June 5, 2019, the U.S. Securities and Exchange Commission (the "SEC") voted on the highly anticipated rulemaking package addressing investment adviser and broker-dealer standards of conduct. The package includes final versions of (i) the SEC's interpretation of the standard of conduct for investment advisers ("Fiduciary Duty Interpretation"), (ii) new rules to require registered investment advisers and registered broker-dealers to provide to retail investors a customer relationship summary ("Form CRS"), (iii) a new rule establishing a standard of conduct for broker-dealers when recommending securities to retail customers ("Regulation Best Interest"), and (iv) the SEC's interpretation of the "solely incidental" prong of the broker-dealer exclusion from the definition of investment adviser in the Investment Advisers Act of 1940 (the "Advisers Act").
Proposed versions of the Fiduciary Duty Interpretation, Form CRS, and Regulation Best Interest were published for comment last April. The SEC did not issue a proposed version of its interpretation of "solely incidental" (although it did request comment on the meaning of "solely incidental" as part of the 2018 rulemaking package). In the coming days, we will publish a more fulsome description of today's rulemaking package.