SEC Chairman Jay Clayton SEC Chairman Jay Clayton (Photo: Andrew Harrer/Bloomberg)

The Securities and Exchange Commission “really encourages engagement” as the agency implements Regulation Best Interest, the agency’s Chairman, Jay Clayton, said Tuesday.

“I want to know: Have we preserved choice?” Clayton said during a question-and-answer session at the Securities Industry and Financial Markets Association’s annual conference in Washington. “Choice in a way that provides investors the choice and protection that they deserve and expect?”

Clayton added that “from where we were two and a half year ago to where we are today, I’m extremely pleased. I think we have a set of rules that will really benefit investors, add transparency, add obligations and will benefit our markets. I’m pleased with the progress we made and I think it was long overdue.”

In the run-up to Reg BI, Clayton said, “it became very clear to me that a fee-for-service model is right for some people … and a transaction-based model is right for others.”

Ken Bentsen, SIFMA’s president and CEO, who was interviewing Clayton, said SIFMA agreed with his assessment of Reg BI. “It’s a tough rule, and we’re digging through it; a lot of work’s being done on it,” Bentsen said. “We think it was the right thing.”

Clayton told reporters after his remarks that he was not concerned about the lawsuits against Reg BI. “It’s a pending litigation, there’s not much else I can say.”

Eight attorneys general as well as XY Planning Network have filed suits against Reg BI.

Clayton also said a proposal will likely be released soon on the accredited investor definition that “will reflect the comments we received.”

The agency’s Reg Flex agenda, Clayton said, could be released as soon as Tuesday.

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