The SEC recently adopted Form CRS, which requires registered investment advisers and broker-dealers to deliver client relationship summaries on Form CRS to all retail investors and to file the forms with the SEC. At the same time, the SEC also adopted Regulation Best Interest (Reg BI), which imposes a fiduciary standard on broker-dealers with regard to retail customers. The June 30, 2020, compliance date for Reg BI and Form CRS is fast approaching. The SEC Office of Compliance Inspections and Examinations (OCIE) issued a pair of risk alerts (Risk Alerts) pertaining to examinations focusing on compliance with Reg BI and Form CRS. The Risk Alerts detail the specific areas on which OCIE will focus in initial exams, emphasizing the adoption of appropriate compliance policies and procedures and the documentation that advisers will be expected to produce. This article, the first in a two-part series, reviews the key provisions of the Risk Alerts, as well as the status of the June 30 compliance deadline. The second article
will provide key takeaways from the Risk Alerts for broker-dealers and investment advisers. See “A Roadmap for Preparation and Delivery of New Form CRS
” (Mar. 19, 2020). For discussion of Reg BI, see “Present and Former SEC Attorneys Discuss Retail Investors, CAT Implementation, Enforcement Issues, Reg BI and SRO Oversight
” (Dec. 12, 2019); and “SEC Chair Defends Regulation Best Interest and Investment Adviser Fiduciary Duty
” (Sep. 19, 2019).