Suitability, Reg BI, and Form CRS

What this video covers

• The three distinct obligations under the Financial Industry Regulatory Authority (FINRA) suitability rule: reasonable-basis, customer-specific, and quantitative suitability, and which survive the institutional-customer exemption
• The two strict prongs of the institutional-customer exemption, why silence fails the second prong, and what exam writers love to test about Blake's pitch to the institutional buyer
• How Regulation Best Interest (Reg BI) raises the bar above suitability for retail customers through its four component obligations, and why mitigation of conflicts beats mere disclosure
• The surprisingly broad definition of retail customer under Reg BI and Form CRS, and why Val's $50 million net worth does not remove her from retail status
• The Form CRS delivery triggers, two-page cap, filing and delivery requirements, recordkeeping period, and the earliest-of timing rule
• The 15% presumption for organization and offering expenses and the 10% presumption for underwriter compensation in publicly offered direct participation programs (DPPs) and unlisted real estate investment trusts (REITs)
• Research analyst quiet periods: 10 calendar days for initial public offering (IPO) managers or co-managers, 3 calendar days for secondary offering managers or co-managers, and zero days for non-manager syndicate members on secondary offerings
• The fiduciary information rule and the strict barrier against using transfer agent or paying agent shareholder lists to solicit purchases, sales, or exchanges without specific issuer request