WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission (SEC) on Wednesday published a staff bulletin that seeks to clarify how broker dealers and investment advisors must address conflicts of interest when providing investors with advice and recommendations.
The guidance aims to spell out expectations amid industry “misconceptions,” an SEC official told reporters, adding that while all financial firms and professionals have some conflict, the “nature and expense” of those conflicts can vary.
“The steps firms take to address conflicts of interest need to be tailored to their particular business model,” the official said.
“They need to be designed to prevent those conflicts of interests that are present at that particular firm from causing the firm and its financial professionals to place their own interests ahead of the retail investors interests and thereby to violate their best interests obligation.”
(Reporting by Katanga Johnson in Washington; Editing by Alison Williams)
