Hanlon Supporting Broker Dealers Complying with SEC’s Regulation BI Rule

Regulation BI (Best Interest) is a Securities and Exchange Commission (SEC) rule that requires broker-dealers to only recommend financial products to their clients that are in their clients’ best interests, and to clearly identify any potential conflicts of interest and financial incentives the broker-dealer may have with those products. The rule falls under the Securities and Exchange Act of 1934 and establishes a standard of conduct for broker-dealers when recommending any securities transaction or investment strategy.

Some critics see the SEC’s Regulation BI as a weak replacement of the U.S. Department of Labor’s failed Fiduciary Rule. Regardless, by June 30, 2020, all registered broker-dealers must begin complying with Regulation Best Interest. In our ongoing efforts to support our Broker-Dealer Customers, Hanlon has implemented enhancements to our Managed Accounts Platform (HMAP) to facilitate compliance with the SEC’s Regulation BI Rule. Just a few of those enhancements include:

Proposal Tool with Risk Calculation and Fee Transparency

  • Ensuring Client Risk Tolerance is Identified and Client Invested Appropriately
  • Identify Risks and Fees Associated with the Advisor’s Recommendation

Support Disclosure Obligation with

  • Automated Delivery of Form CRS Relationship Summary
  • Manager / Model Fact Sheets
  • BD (Firm) Specific Disclosures
  • Manager ADV Delivery

Vetting of Investment Managers supporting Care Obligation

  • Reasonable Due Diligence, Care, and Skill of Investment Management Managers and Models

Standardized and Transparency into Fees

  • Fixed BD (Firm) Fee
  • Fixed Platform Fee
  • Visibility into Manager and Advisor Fees

One Location for BD (Firm) to Manage Models and Corresponding Manager Fees

Roll up of Investment Data to Support Regulator Reporting and Compliance Oversight

Hanlon Investment Management is an SEC registered investment adviser with its principal place of business in the State of New Jersey with offices at 3393 Bargaintown Rd., Egg Harbor Township, NJ 08234. Being a registered investment advisor does not imply any level of skill or training. This material should not be construed as an offer to sell or the solicitation to buy any security. We are not soliciting any action based on this material. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. Hanlon Investment Management and its representatives are in compliance with the current registration and notice filing requirement imposed upon registered investment advisers by those states in which Hanlon Investment Management maintains clients. Hanlon Investment Management may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements. Any subsequent, direct communication by Hanlon Investment Management with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status, service and fees of Hanlon Investment Management, please contact Hanlon Investment Management or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov).

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