SEC Issues New FAQ On Reporting Disciplinary History On Form CRS

The SEC staff updated its FAQ for Form CRS to make explicit that a firm must answer "yes" or "no" to the question of whether the firm or its employees has a legal or disciplinary history. SEC Chair Jay Clayton, along with Dalia Blass, Director of Investment Management, and Brett Redfearn, Director of Trading Markets, issued a joint statement touting the value of Form CRS to investors and, more specifically, the value of the disclosure of a firm's disciplinary history.

Commentary

In view of the criticism, both explicit and implicit, that Regulation Best Interest has received from various parties, Chair Clayton is making a good effort to sell its benefits and to forestall the various states from going their own way and creating their own diverse regulations regarding the obligations that broker-dealers and advisers have to their clients.