Reg BI, Clayton said, “will substantially enhance the broker-dealer standard of conduct beyond existing suitability obligations.”

Originally published on Think Advisor by Melanie Waddell.

The Securities and Exchange Commission passed by a 3-1 vote Wednesday its controversial Regulation Best Interest, which SEC Chairman Jay Clayton said would “substantially enhance the broker-dealer standard of conduct beyond existing suitability obligations.”

The agency also passed by a 3-1 vote the three other prongs of the advice-standards package — the Form CRS Relationship Summary, the Standard of Conduct for Investment Advisers, and a new Interpretation of “Solely Incidental.”

Knut Rostad, president of the Institute for the Fiduciary Standard, told ThinkAdvisor at the SEC meeting that it is a “catastrophe that will be remembered as black Wednesday. From the staff’s descriptions, there’s nothing materially different in the proposals other than they are using the word mitigation more often.”

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