Decoding the SEC rulemaking package on standards of conduct for investment professionals

Abstract

Purpose

To provide an overview of the US Securities and Exchange Commission’s (SEC’s) recently proposed rulemaking package relating to standards of conduct for investment professionals. The three proposals included: interpretation regarding the standard of conduct of investment advisers under the Investment Advisers Act of 1940; Form CRS which both registered investment advisers and registered broker-dealers would have to provide to retail investors; and proposed regulation best interest.

Design/methodology/approach

Reviews and summarizes the three individual proposals.

Findings

The SEC has proposed this rulemaking package in order to meet three goals: enhance retail investor protection and decision making, preserve investor choice and cost, and raise retail investor awareness of whether they are doing business with a registered financial professional. The SEC is looking for feedback, particularly from retail investors, on whether these proposals would achieve the SEC’s goals.

Originality/value

Summarizes the three proposals in a manner that provides insight into how investment advisers and broker-dealers would be required to conduct business with retail investors if the proposals are adopted in the current form.

Citation

Attar, M.M., Bateman, M., Drogin, J.P., Pugliese, D., Schwartz, R.L. and Vargo, K.K. (2018), "Decoding the SEC rulemaking package on standards of conduct for investment professionals", Journal of Investment Compliance, Vol. 19 No. 4, pp. 6-12. https://doi.org/10.1108/JOIC-06-2018-0045