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Regulation and Compliance > Federal Regulation > SEC

SEC's Peirce on Reg BI: 'It's Important That We Move Forward'

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Securities and Exchange Commission member Hester Peirce said Tuesday that she “looks forward” to seeing Regulation Best Interest — part of the securities regulator’s advice-standards package — finalized, as Reg BI is a priority for SEC Chairman Jay Clayton and for her.

While not offering a timeline for completion, Peirce, a Republican, stated during an event held at the Bipartisan Policy Center in Washington on Tuesday: “I do think it’s important that we move forward with the [Reg BI] rulemaking.”

The government shutdown “did affect a lot of things, and it affected rulemakings as well, so that does have an effect on Reg BI as well as other rulemakings,” Peirce said at the BPC event, titled “The Year Ahead for Capital Markets.”

Also on the panel was Brian Quintenz, a commissioner at the Commodity Futures Trading Commission.

Reiterating previous comments that the SEC’s approach to cryptocurrencies is “confusing,” Peirce stated that she believes the securities regulator needs “to do a better job in explaining to people how our rules apply to this sector.”

Her “main concern,” she continued, has been that the agency needs “to do a better job providing guidance” about cryptocurrencies. “A lot of people are out there raising money and just calling it ‘crypto,’ and say ‘Ah, we can avoid the securities laws,” Peirce stated.  “…But there are gray areas, and I think we need to do a better job in sort of laying the groundwork on how someone would come to decide which side they’re on.”

Peirce also cautioned against the SEC’s unwillingness to approve a Bitcoin ETF.

Her concern, she said, is that the SEC’s approach “looks like a merit-based approach, judging the underlying Bitcoin markets and saying we don’t think they’re regulated enough. There are lots of markets that aren’t regulated; nevertheless, we build products on top of them, so I think we have to be very careful about that reasoning.”

As to the Form PF, which private fund advisors managing $150 million or more of assets have been required to file annually since 2012, Peirce stated that she believes the SEC “needs to think more carefully about what information [the agency] is collecting … and we need to use the information that we get.”

The “strange thing” about Form PF, Peirce said, “is that it really wasn’t designed for either [the SEC] or the CFTC, it was designed for the systemic risk regulators, so it’s a little odd for us to try and figure out what they might need.”

Added Peirce: “To the extent that we’re taking in the data and looking at it, there should be a purpose for us in looking at the data we get.”

Quintenz added that “Any changes to Form PF would have to be adopted jointly” between the SEC and CFTC.

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