Stockbrokers’ Standard of Conduct

The SEC adopted the Regulation Best Interest (Reg BI) requiring broker-dealers to adhere to a certain standard when making recommendations to retail customers (e.g., small business employees for their 401(k) accounts) on a securities transaction or investment strategy. There’s a 2-prong test, and it can’t be satisfied by disclosure alone. The rules will be effective 60 days after their publication in the Federal Register, but the compliance deadline for brokers is June 30, 2020.