Regulatory Outlook | 07.01.20
Firms, Regulators, Plaintiffs’ Bar Set to Determine Whether Reg BI Protects Investors
As The SEC's Regulation Best Interest becomes a rule that is in force as of Wednesday, there is no clear consensus on how to determine when the rule is working or when it fails to protect investors. “What [happens] now is going to depend on regulators, firms, and the plaintiffs’ bar,” said John Lukanski, a partner at Reed Smith. He suggests looking at the number of SEC enforcement actions, arbitration cases, and lawsuits. “If you don’t see a major uptick, Reg BI is working because Reg BI has done its job in protecting customers.” Most observers are expecting the SEC to ease into examinations and enforcement. In guidance issued in early April, the agency said it is looking for “good faith” efforts by financial firms in implementing the regulation.
Read the full article on InvestmentNews.