SERIES 6 EXAM ASKS QUESTIONS ABOUT SEC RULE BEST INTEREST
SEC Regulation Best Interest The SEC has adopted Regulation Best Interest, or Regulation BI. This regulation requires a brokerage firm, advisory firm, or representative, to consider a retail customer's best interests when making a recommendation to that customer. The broker may not factor in his or her interests when telling a retail customer to buy this or that stock, mutual fund, or any other security. Paramount is that a recommendation be in the customer's best interest. Thus, Regulation BI seeks to eliminate conflicts of interest, such as allowing a representative to recommend shares of a particular mutual fund that carry a sales charge higher than another fund, when apart from sales charge, both funds are equally suitable. FINRA's Study Outline for the Series 6 includes material about Regulation Best Interest. See 2.1, 2.2, 2.3 in the Content Outline. Here is the link to our book, Study for the Series 6 Exam, on Amazon. Here is the link to FINRA's Content