On August 3, 2022, the U.S. Securities and Exchange Commission (SEC) published a Staff Bulletin providing guidance regarding conflicts of interest under broker-dealer Regulation Best Interest (Reg BI) and investment adviser fiduciary duty standards. The Bulletin, entitled “Standards of Conduct for Broker-Dealers and Investment Adviser Conflicts of Interest,” signals the Staff’s continued focus on conduct standards and expansive interpretation of these standards. The Bulletin also reminds firms of their obligation—often beyond disclosure—to address conflicts and to have rigorous and dynamic policies in place to identify and address conflicts.
After an introductory background section summarizing conflict-of-interest rules under Reg BI and investment advisers’ fiduciary duty, the Bulletin takes the form of answers and guidance in response to 13 questions posed by a hypothetical firm. These questions and answers are grouped around concepts discussed in previous Reg BI guidance: identifying conflicts of interest, eliminating conflicts of interest, mitigating conflicts of interest, limited product menus, and disclosing conflicts of interest. A few themes running through the Bulletin are discussed in the article linked below.