Reg Bi
Under Regulation Best Interest (Reg BI), broker-dealers must:
Reg BI has 4 obligations: Disclosure, Care, Conflict of Interest, Compliance. Form CRS required.
Complete Analysis & Legal Rationale
Regulation Best Interest requires broker-dealers to act in the best interest of the retail customer when making recommendations. This includes a care obligation (understanding risks, considering customer profile), conflict mitigation, and proper disclosure through Form CRS.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Primary source referenced in the explanation (Regulation Best Interest). Verify current text before launch.