SEC’s Reg BI Rule Strengthens Investor Protections, Improves Trust and Confidence

ASA members have always sought to maintain trust and confidence by acting in the best interest of the individuals and families they serve.

WASHINGTON – The American Securities Association (ASA) today applauded the U.S. Securities and Exchange Commission (SEC) for finalizing its Regulation Best Interest (Reg BI) rule to strengthen investor protections, improve accountability across the financial industry, and instill greater confidence in Americans as they save and invest for a better future.

“ASA members have always sought to maintain trust and confidence by acting in the best interest of the individuals and families they serve,” said ASA CEO Chris Iacovella. “By finalizing Reg BI and strengthening investor protections, the Commission will bring certainty to Main Street investors, working families saving and investing for a better future, and financial professionals across the country who do the right thing every day. This vote further solidifies Chairman Clayton’s investor-first legacy and re-establishes the SEC as the proper regulator of relationships between firms and their customers. Those at the state level—largely motivated by politics—should recognize that this rule sets a national standard and must refrain from creating a patchwork of unworkable regulations that will directly harm investors and their local economies.”

The SEC’s Reg BI rule improves investor protection by requiring financial firms and professionals to:

1. Put their customers interests first by not placing their own interests ahead of clients;

2. Disclose necessary facts about relationships, including fees and compensation related to financial products they recommend;

3. Exercise diligence, care and skill when making recommendations of investment products; and

4. End high-pressure sales practices.

Earlier this year, ASA CEO Iacovella penned an op-ed in InvestmentNews calling on the SEC to finalize Reg BI to strengthen investor protections and help weed-out bad actors that tarnish the industry and harm investor confidence. To read the op-ed, click here.

###