SEC Proposes Standard of Conduct for Broker-Dealers and Interpretation Regarding Standard of Conduct for Investment Advisers: SEC Approves Package of Proposed Rules and Interpretations Designed to Enhance Protections and Preserve Choice for Retail Investors in Their Relationships With Investment ProfessionalsSullivan & Cromwell LLP - May 10, 2018
On April 18, 2018, the Securities and Exchange Commission (“SEC”) voted 4 to 1 to approve a package of proposed rules and interpretations with the stated goal of improving “the quality and transparency of investors’ relationships with investment advisers and broker-dealers while preserving investor access to a variety of advice relationships and investment products.”
The approximately 1,000-page package comprises three separate proposals:
(2) a proposed interpretation regarding the standard of conduct for investment advisers under the Investment Advisers Act of 1940 (the “Advisers Act”); and
(3) proposed new and amended rules under the Advisers Act and the Exchange Act that, among other things, require registered investment advisers and registered broker-dealers to provide a brief relationship summary to retail investors in a mandatory disclosure form that summarizes key aspects of the relationship between such firms and their clients.