SEC’s Clayton: Comment Period on Advice Standards May Be Extended

Securities and Exchange Commission Chairman Jay Clayton, who was peppered with questions about the agency’s proposed Regulation Best Interest for brokers during a House panel oversight hearing Thursday, told lawmakers that a lengthier comment period may be needed for the commission’s advice standards proposal.

Clayton’s testimony before the House Financial Services Committee came the same day that the U.S. Court of Appeals for the 5th Circuit issued its order vacating the Labor Department’s fiduciary rule.

Rep. Ann Wagner, R-Mo., a vocal critic of Labor’s rule, said during a Thursday hearing held by the House Financial Services Committee on SEC oversight that she was happy to see that the SEC “was finally taking the lead” on an advice rule that Dodd-Frank asked the agency to do “some eight years ago.”

She asked Clayton if the agency’s Regulation Best Interest for brokers, part of the securities regulator’s advice standards package, achieves the agency’s stated goal of “clarity, consistency and coordination.”

Clayton responded: “I do. … This was a truly collaborative effort.”

Wagner interrupted: “With the Department of Labor too?”

Clayton continued: “With the Department of Labor. I’m in contact with [Labor] Secretary [Alexander] Acosta, our [SEC, DOL] staffs are in contact with each other. In fact, our inspection staff recently connected with the Department of Labor to show how we would inspect for compliance with this [Reg BI] rule.”

Wagner then asked Clayton if the agency would stick with the Aug. 7 comment period deadline or extend it.

“I think I’ll see in August,” Clayton responded, adding that he thought the “lengthy” 90-day comment period would suffice and that the agency “should not take forever.”

Rep. David Scott, D-Ga., queried Clayton on whether he’d “commit” to being the person to see the advice package rule “through to the end.”

Clayton responded: “No one person can do this.”