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SEC Reg BI Update – June 30, 2020

Jul 02, 2020

It has been a busy few weeks in the regulatory world of financial services and we wanted to give you a quick overview of what is going on.  Our hope is to give you a synopsis in case you have any questions and would like to discuss any of these items in more detail with us.  We want to make sure that we answer any questions that you all might have.

First, the Securities Exchange Commission’s (SEC) Regulation Best Interest, also called Reg BI, went into effect on June 30th. This regulation establishes a “best interest” standard of conduct in making recommendations to a client.  Because all advisors at Charles Stephen are fiduciaries and act in a fiduciary capacity, we are actually held to a higher standard than what Reg BI requires. We support this legislation and have been a fiduciary since 1983.

How does this affect you? More paperwork in the form of CRS disclosures. You may see a form CRS disclosure from many of our partners, such as Kestra or Assetmark, sent to you in the next few weeks.

The Treasury Department has also been very busy with several notices in the last few days.  First, Notice 2020-50 gave more guidance on Coronavirus-related distributions from IRAs and retirement plans.  Notice 2020-51 clarified Required Minimum Distribution requirements for 2020.  With this notice, anyone who has taken a required minimum distribution in 2020 and wants to roll it back into the account can do so by August 31, 2020, even if it has been more than 60 days since they took the distribution. It is important to note the August 31, 2020 date as being the last day to roll this money back in so if this something that you would like to do, please be aware of the timing deadline.  And finally, Notice 2020-52 provided relief to some companies who sponsor retirement plans who may not be able to make the employer contribution in 2020.

If you have questions about any of these and how they may specifically affect you, please do not hesitate to call us.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Charles Stephen & Company is not affiliated with Kestra IS or Kestra AS.