“Firms are just going to have to pay careful attention to what happens between now and next June. There is still a lot of interpretation and guidance yet to be provided that will clarify what actions broker-dealers need to take,” Klapprodt said.
“If the SEC doesn’t offer clarification, where you will get it is in arbitration and from courts. Plaintiff attorneys will be all over this if they’re seeing ambiguous terms. You’ll see occasions where brokers may think they’re doing all they can, but that may not be the case if additional guidance isn’t provided. If the SEC doesn’t act, courts will define what ‘reasonable’ means,” he added.
“The SEC is encouraging engagement,” Lundy said. The agency is establishing an Inter-Divisional Standards of Conduct Implementation Committee, and “is encouraging firms to engage with this committee as questions arise in planning for implementation.”