Regulation Best Interest (Reg BI)

What this video covers

• Who Reg BI applies to (broker-dealers and associated persons) and who it does not apply to (investment advisers, who remain under the fiduciary standard)
• The definition of a retail customer: a natural person using the recommendation primarily for personal, family, or household purposes
• The four component obligations: Disclosure, Care, Conflict of Interest, and Compliance, and why all four must be satisfied
• What the Disclosure Obligation requires regarding compensation: sources and types of direct and indirect compensation, not specific dollar amounts
• What the Care Obligation demands: reasonable diligence, understanding risks and rewards, and considering reasonably available alternatives
• The Conflict of Interest Obligation's elimination requirement for sales contests, quotas, bonuses, and non-cash compensation tied to specific securities within a limited period
• How NASAA incorporation makes Reg BI enforceable as both a federal rule and a state dishonest practice, triggering dual enforcement