The self-regulator will require brokerages to file retail communications related to the sales of unregistered securities in addition to the offering document.
'A lot of smaller RIAs don’t understand the magnitude of the work necessary to comply by December,' said Brad Campbell, a former assistant Labor secretary.
A new study by the Institute for the Fiduciary Standard asserts the document blurs the line between advisers and brokers.
Regulators said brokerages should not only tell reps what Reg BI says but provide examples of how to meet its requirements.
Maryland Securities Commissioner Melanie Senter Lubin said brokers should be able to clear their records only in very limited circumstances.
A NASAA exam sweep shows that more than half of advisers lack policies and procedures to address exploitation of elderly clients.
The network is prodding the SEC to force brokers to register as advisers if they give advice, provide financial planning or hold themselves out as advisers.
The more individually tailored a communication to a customer is, the more likely it is a recommendation, SEC Commissioner Allison Herren Lee said during the NASAA fall meeting.
The broker-dealer self-regulator launched the exam sweep a couple of weeks after the Securities and Exchange Commission released a request for comment about the “digital engagement practices” used by investment advisers and broker-dealers.
The rule change is effective immediately and will become operative on Jan. 1, if the Securities and Exchange Commission does not object.
