Skip to main content

A Conversation with SEC Chairman Jay Clayton

The Securities and Exchange Commission is in the midst of tackling a number of issues that affect broker-dealers and customers. During FINRA’s Annual Conference, SEC Chairman Jay Clayton joined FINRA President and CEO Robert Cook for a conversation about these securities industry trends. The two discussed the SEC’s approach to standard of conduct rules, the impact of cryptocurrencies and technology on markets and the future of the broker-dealer model.

On Proposed Regulation Best Interest and Standards of Conduct: “[Investors] can’t expect guaranteed returns. They can’t expect the things we can’t give them, but what can they expect in a reasonable commercial relationship?...They can expect the core principle that the professional can’t put their interests ahead of the investor.”

On Market Availability for Retail Investors: “I continue to worry that retail investors do not have access to as broad a slice of our capital markets as I would like them to have. Said another way, you have private capital and public capital. Retail investors can really only participate in the public capital, and to the extent private capital has become so robust, you’ve shrunk opportunities. That bothers me a bit. If that trend continues, a much more select group is participating in the growth of the economy.”

On Bitcoin: “What we are seeing in the ICO space is people not following either the private placement or public rules. Rather, they are taking the most advantageous pieces of a public offering…and providing none of the protections you can get in a private placement and somehow saying this was ok because it is a new technology. It didn’t take me very long to figure out this was not a good idea.”