Study for the Series 6 Exam

Study for the Series 6 Exam  by Bob Eder J.D. includes discussion of Regulation Best Interest, or Regulation BI, which now applies to dealing with retail customers.  Regulation Best Interest now requires every registered representative to view his/her recommendations through the prism of whether such recommendation is in the retail customer's best interests. Regulation BI went into effect on June 30, 2020. Prior to this date, a representative was required merely to assure that his/her recommendations met the test of suitability.  Furthermore, there was no requirement to present a retail customer with conflicts of interest in writing. Regulation BI now requires this disclosure. Regulation BI applies to recommendations also on which type of accounts to recommend to retail customers, not just to securities recommendations. This means before a representative puts a retail customer into a mutual fund account, or into a margin account, or into a wrap fee account, the representa...

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...