US SEC Regulation Best Interest (17 CFR 240.15l-1)
Conflict of interest obligation (paragraph (a)(2)(iii)) – US SEC Regulation Best Interest (17 CFR 240.15l-1)

US SEC Regulation Best Interest (17 CFR 240.15l-1) a2iii-B: Identify and mitigate conflicts that give individuals an incentive to put the firm first

What does a2iii-B require?

Beyond disclosure, the firm's written procedures must identify and mitigate any conflict that creates an incentive for an associated natural person to put the firm's or their own interest above the customer's, such as differential compensation across products, payouts tied to proprietary products, or incentives on rollovers. Mitigation means reducing the potential effect of the incentive on the recommendation, for example by levelling compensation, capping differentials or heightened supervision of the affected recommendations.

Maintained by Gerard Blokdyk

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