On June 5, 2019, the SEC issued an Interpretive Release designed to “reaffirm, and in some cases clarify, the standard of conduct that investment advisers owe to their clients.” The Interpretive Release highlights existing principles relevant to an adviser’s fiduciary duty; it does not create any new regulation.

The Interpretive Release sets forth the SEC’s views on the application of Section 206 of the Investment Advisers Act of 1940 (the “Advisers Act”) to SEC-registered advisers, state-registered advisers and investment advisers that are exempt from registration (including exempt reporting advisers) or that are subject to a prohibition on registration under the Advisers Act. In short, any entity or individual that meets the definition of “investment adviser” set forth in the Advisers Act will be held to the standards outlined in the Interpretive Release.

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