Heidi is my go-to destination for all things Reg BI.  Here’s a quick, but really helpful, update from her. –  Alan


This week OCIE issued twin alerts relating to the upcoming implementation of Reg BI.  A lot of the statements are nothing new – brief repetitions of the Regulation, the four obligations, etc.  None of that should be new information for firms at this point.

What is new (and useful) is that in one of the two Alerts, OCIE appended a list of documents it will likely request when it begins conducting Reg BI examinations (and it intends to conduct those exams within a year of the June compliance deadline).

In some respects, the document request list is not surprising in that it is focused on disclosure documents, disclosure procedures, and the way fees are charged/disclosed/supervised.  In other respects, its quite novel.  The SEC is, essentially, telling firms – well in advance – the information it will be asking to see and the questions it intends to ask during the exam.  Firms will want to make sure these items have been reviewed and addressed, obviously, but they should also be prepared to explain or defend how the firm approached these issues.  Remember, the SEC is looking for “reasonableness” and, as a result, the effort and attention to detail that went into compliance is going to be important.

The second alert focused on Form CRS, specifically – not only on the content and form, but also how it was delivered to both new and existing clients.  Be mindful of the recordkeeping requirements as to transmission data.

The uncertainty and interruptions caused by the spreading pandemic have only added to the anxiety surrounding the June compliance deadline but, for now, the SEC seems intent to hold to the schedule it established last year.  If you are looking to assess your readiness – not only for implementation but for the exams that will follow – see how completely you can address each of the “mock” requests contained in these two Alerts.