• * Disclose to the retail customer the key facts about the relationship, including material conflicts of interest;
• * Exercise reasonable diligence, care, skill, and prudence, to (i) understand the product; (ii) have a reasonable basis to believe that the product is in the retail customer’s best interest; and (iii) have a reasonable basis to believe that a series of transactions is in the retail customer’s best interest; and 
• * Establish, maintain and enforce policies and procedures reasonably designed to identify and then, at a minimum, to disclose and mitigate, or eliminate, material conflicts of interest arising from financial incentives; other material conflicts of interest must be at least disclosed.

The SEC also proposed to create a new short-form disclosure document called the Form CRS (customer/client relationship summary), which would provide retail investors with a simple, easy-to-understand summary of the nature of the broker-dealer's relationship with their investment professional. This form would supplement other, more detailed disclosures. Broker-dealers filling out this form would also need to disclose the material facts relating to the scope and terms of the relationship with the investment adviser. 

Finally, the SEC would restrict certain broker-dealers and their financial professionals from referring to themselves as advisers, and would require broker-dealers to disclose their registration status with the SEC in certain retail investor communications. 

SEC Chairman Jay Clayton stated, “The tireless work of the SEC staff has proven to me that we can increase investor protection and the quality of investment services by enhancing investor understanding and strengthening required standards of conduct. Importantly, I believe we can achieve these objectives while simultaneously preserving investors’ access to a range of products and services at a reasonable cost.  The package of rules and guidance that the Commission proposed today is a significant step to achieving these objectives on behalf of our Main Street investors.”