Check Call: Broker Transparency Rule Gets Second Comment Period

The Securities and Exchange Commission (SEC) has announced a second comment period for its proposed broker transparency rule, Regulation Best Interest (Reg BI), and Form CRS Relationship Summary. This move comes after receiving feedback from the public and industry stakeholders during the initial comment period, which ended on August 7, 2019. The new comment period will last for 30 days, starting from the date the proposal is published in the Federal Register.

The proposed rule aims to enhance the quality and transparency of retail investors' relationships with investment advisers and broker-dealers. It introduces new standards of conduct for broker-dealers, requiring them to act in the best interest of their retail customers when making recommendations. Additionally, the rule requires registered investment advisers and broker-dealers to provide retail investors with a simple, easy-to-understand relationship summary, facilitating layered disclosure and comparability among different types of firms.

The SEC's decision to extend the comment period reflects its commitment to engaging with the public and industry stakeholders to ensure that the final rule addresses their concerns and promotes investor protection, while preserving access to a variety of investment services and products. During the second comment period, the SEC will consider the feedback received and make any necessary adjustments to the proposed rule.



The proposed broker transparency rule has sparked a range of reactions from industry participants and investors. Some have praised the SEC's efforts to strengthen investor protection and promote transparency, while others have raised concerns about the potential impact on the cost of services and accessibility of investment products and services. The extended comment period provides an opportunity for all stakeholders to voice their opinions and contribute to the development of the final rule.

As the SEC moves forward with the second comment period, it is essential for investors and industry participants to engage in the process and provide their input. By doing so, they can help shape the final rule and ensure that it balances the need for investor protection with the preservation of choice and cost in investment services and products. The ultimate goal is to create a regulatory framework that promotes transparency, protects investors, and maintains a vibrant and competitive investment landscape.