On June 30, 2020, the SEC began the enforcement of Regulation Best Interest (“Reg BI”).
This guidance requires all SEC-registered investment advisers and broker-dealers to be in compliance with the newly adopted Regulation Best Interest (Reg BI) and to file the Form CRS/ADV Part 3 on IARD/CRD.
While the guidance covers investment advisers and broker-dealers registered at the federal level, most states have not chosen to require the form from advisers registered at the strategic level.
However, there is at least one state currently requiring the filing.
Rhode Island’s Requirement for Form CRS
According to Securities Bulletin Number 2020- 2, the Rhode Island Department of State will require the Form CRS pursuant to Section 209(c)(1) of the Rhode Island Uniform Securities Act) and 230-RICR-50-05-2.7-B of the Rules and Regulations of the Rhode Island Securities Department and the Administrator of the Department of Securities.
While the statutory guidance isn’t explicit regarding the form, it does give the state authority to require investment advisers and broker-dealers to file whatever documents they “determine necessary” with the state. Rhode Island-registered investment advisers will need to file this information and make it available to their investors.
Initially, Oklahoma also communicated the state-level form as a requirement. While the state has since rescinded this requirement, it continues to be evaluated as a potential best practice.
While no other states are making this filing a requirement currently, some regulators have noted that the Form CRS provides helpful, plain-language guidance that can be beneficial to clients/ relationships.
As additional states consider the addition of this requirement, we will update this blog post to ensure it reflects the most up-to-date Form CRS filing information. If you need guidance or support with this or other regulatory filings, our compliance consulting team is available to help.
To learn more about Form CRS and Reg BI, review these posts:
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About Red Oak Compliance Solutions
Red Oak Compliance Solutions is a leading provider of intelligent compliance software, offering a range of AI-powered solutions designed to help firms of all sizes successfully navigate the increasingly complex regulatory landscape. Our suite of 17(a)-4/WORM compliant features offer risk minimization, cost reduction, and process optimization capabilities with features that are designed to evolve with our client’s needs. Our flagship advertising review software enables firms to deliver compliant content to the market with confidence, faster. Our Disclosure Management and Intelligence solution simplifies the management of disclosures, while our Registration Management solution automates and streamlines the licensing and registration process, further enhancing your internal processes.