Review a sample of retail recommendations against Regulation Best Interest
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- For each recommendation the lawyer selects, extract the security or strategy, the retail customer's investment-profile fields on the file, any conflict noted, and the page cite. Do not say whether the recommendation was in the customer's best interest.
- What the lawyer must review
- Regulation Best Interest, 17 C.F.R. § 240.15l-1, applies when a broker-dealer or an associated person recommends a securities transaction or investment strategy involving securities, including an account recommendation, to a retail customer. The care obligation includes a reasonable basis to believe the recommendation is in the best interest of that particular customer based on the investment profile and the risks, rewards and costs, and that it does not place the broker's interest ahead of the customer's. The profile in the rule includes age, other investments, financial situation and needs, tax status, investment objectives, experience, time horizon, liquidity needs and risk tolerance. You make that judgment. An investment adviser's duty is section 206 of the Advisers Act, not this rule. Do not mix the two.
- Written for / version
- United States versionUSCth
Who does what
| Role | What they do |
|---|---|
| Assistance | Potential support includes extracting and organising information. Confirm the tool’s capability and permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Trace every relied-on figure to its source, confirm dates and assumptions, and independently recalculate totals or derived amounts.
- Verify the applicable jurisdiction and the version of each relevant law, rule or instrument in force at the material time.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.
Forms and precedents for this task
| Form or precedent | Kind | AI use | Summary |
|---|---|---|---|
| Regulation Best Interest recommendation review checklist | Checklist | AI use Yellow | Review checklist for a recommendation by a broker-dealer to a retail customer, using the four obligations in Rule 15l-1. |
| Regulation Best Interest care and profile checklist | Checklist | AI use Yellow | Question list for the care obligation, using the investment-profile factors the rule lists. |
Signed-in accounts can read the full text of each one. All precedents.