Skience offers a simple, out-of-the-box solution to enable firms and advisors to comply with the recurring delivery of the Client Relationship Summary forms mandated by Regulation Best Interest.
Introduction to Reg BI
In June 2019, the Securities and Exchange Commission adopted Regulation Best Interest (known colloquially as “Reg BI”), which establishes a new standard of conduct for broker-dealers and independent financial advisors to follow when making a recommendation of any securities transaction or investment strategy involving securities (including account recommendations) to a retail customer. Essentially, this regulation safeguards the interests of the investor by requiring the firm or advisor to demonstrate, when making an investment recommendation to a customer, that they are acting in the best interest of the customer at the time the recommendation is made, without placing their financial or other interest ahead of their customer’s interests. The rule goes into effect June 30, 2020.
Disclosure of the best interest information to the customer is made through a Client Relationship Summary (Form CRS for brokers and Part 3 of Form ADV for investment advisors). Form CRS requires that RIAs, broker-dealers, and associated persons disseminate information relating to the scope, terms and potential conflicts of interest, as well as any disciplinary history, to all retail customers.
Firms and financial advisors will be required to provide Form CRS at five key points, including: By June 30, 2020 to current retail clients; at the start of any new relationship or recommendation (even if agreement is verbal); when there is a change to any account belonging to the retail investor; when any of the disclosures contained within the Form CRS change; or upon request.
The Skience Reg BI Solution
- A flexible, out-of-the-box automated solution for the documentation and delivery of the required disclosure forms—in both paper and digital formats. This Reg BI component can be added to any current version of Skience, and will be available as a standard feature in subsequent versions, beginning with Version 13.0 to be released in June 2020.
- Customized solutions for firms that have broader requirements or require a more sophisticated process.
May 5, 2020