Back to Home

How Prsperite Addresses SEC Regulation Best Interest

Prsperite: /prɒˈsper.ɪ.ti/ (like prosperity)

Regulation Best Interest (Reg BI) establishes a standard of conduct for broker-dealers when making recommendations to retail customers. Prsperite provides comprehensive tools to help your firm meet every requirement.

The Four Obligations of Reg BI

SEC Regulation Best Interest requires broker-dealers to satisfy four component obligations. Prsperite is designed to help your firm demonstrate compliance with each one.

1. Disclosure Obligation

Provide full and fair disclosure of material facts

What Reg BI Requires

Broker-dealers must provide retail customers with full and fair disclosure of all material facts relating to the scope and terms of the relationship, including:

  • Material facts about fees, costs, and compensation
  • The type and scope of services provided
  • Material conflicts of interest
  • The limitations on the services or products offered

How Prsperite Helps

  • Customizable Form CRS and disclosure templates with version control
  • Automated variable replacement for client-specific information
  • Delivery tracking with timestamped acknowledgments
  • Complete audit trail of all disclosure events

2. Care Obligation

Exercise reasonable diligence, care, and skill

What Reg BI Requires

Broker-dealers must exercise reasonable diligence, care, and skill to:

  • Understand the potential risks, rewards, and costs of a recommendation
  • Have a reasonable basis to believe the recommendation is in the customer's best interest
  • Consider reasonably available alternatives
  • Not place the interest of the firm ahead of the customer

How Prsperite Helps

  • Structured recommendation documentation with required fields
  • Built-in best interest rationale capture
  • Cost analysis and comparison tools
  • Client investment profile matching and risk assessment

3. Conflict of Interest Obligation

Establish policies to identify and address conflicts

What Reg BI Requires

Broker-dealers must establish, maintain, and enforce written policies and procedures reasonably designed to:

  • Identify and disclose or eliminate conflicts of interest
  • Identify and mitigate conflicts that create incentives to place firm interests ahead of customers
  • Identify and disclose material limitations on offerings
  • Eliminate sales contests based on sales of specific securities

How Prsperite Helps

  • Conflict of interest identification and documentation per recommendation
  • Integrated conflict disclosure in client communications
  • Firm-level conflict tracking and reporting
  • Compensation structure transparency tools

4. Compliance Obligation

Establish policies to achieve compliance

What Reg BI Requires

Broker-dealers must establish, maintain, and enforce written policies and procedures reasonably designed to achieve compliance with Reg BI as a whole.

  • Comprehensive written supervisory procedures
  • Training programs for associated persons
  • Ongoing monitoring and review systems
  • Complete recordkeeping and audit trails

How Prsperite Helps

  • Supervisor review and approval workflows
  • Complete audit logs for all actions and changes
  • Role-based access controls and permissions
  • Compliance reporting and exception tracking

Form CRS Management

Form CRS (Customer Relationship Summary) is a key disclosure document required by Reg BI. Prsperite provides comprehensive tools for creating, managing, and delivering Form CRS to your retail customers.

Template Management

Create and version-control your Form CRS templates with customizable sections

Automated Delivery

Track delivery timing and method for each client with acknowledgment capture

Event Triggers

Automatic alerts for required disclosure events like account opening and material changes

Audit Trail

Complete history of all Form CRS versions, deliveries, and updates

Ready to Simplify Your Reg BI Compliance?

Get started with Prsperite today and ensure your firm meets all SEC Regulation Best Interest requirements.