Commission Interpretation Regarding Standard of Conduct for Investment Advisers

Document Headings Document headings vary by document type but may contain the following: the agency or agencies that issued and signed a document the number of the CFR title and the number of each part the document amends, proposes to amend, or is directly related to the agency docket number / agency internal file number the RIN which identifies each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions See the Document Drafting Handbook for more details. Securities and Exchange Commission 17 CFR Part 276 [Release No. IA-5248; File No. S7-07-18] RIN 3235-AM36 AGENCY: Securities and Exchange Commission. ACTION: Interpretation. SUMMARY: The Securities and Exchange Commission (the “SEC” or the “Commission”) is publishing an interpretation of the standard of conduct for investment advisers under the Investment Advisers Act of 1940 (the “Advisers Act” or the “Act”). DATES: Effective July 12, 2019. FOR FURTHER INFORMATION CONTACT: Olawalé Oriola, Senior Counsel; Matthew Cook, Senior Counsel; or Jennifer Songer, Branch Chief, at (202) 551-6787 or IArules@sec.gov , Investment Adviser Regulation Office, Division of Investment Management, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-8549. SUPPLEMENTARY INFORMATION: The Commission is publishing an interpretation of the standard of conduct for investment advisers under the Advisers Act [ 15 U.S.C. 80b ]. [ 1 ] Table of Contents I. Introduction A. Overview of Comments II. Investment Advisers' Fiduciary Duty A. Application of Duty Determined by Scope of Relationship B. Duty of Care 1. Duty To Provide Advice That Is in the Best Interest of the Client 2. Duty To Seek Best Execution 3. Duty To Provide Advice and Monitoring Over the Course of the Relationship C. Duty of Loyalty III. Economic Considerations A. Background B. Potential Economic Effects I. Introduction Under federal law, an investment adviser is a f…