SEC Chair Clayton Confirms Reg. BI Implementation Date

In a public statement confirming the upcoming June 30, 2020 implementation date for Regulation Best Interest ("Reg. BI"), SEC Chair Jay Clayton asserted that the "effects of the COVID-19 pandemic weigh substantially in favor of implementing the Reg BI and Form CRS requirements as soon as practicable."

Mr. Clayton expressed concern that, during periods of volatility, Main Street investors are being marketed investment products that may not be in their best interest, such as those that (i) are in response to the effects of COVID-19, (ii) leverage exposure and risk through a mix of options, futures or other derivatives, and (iii) have complex structures. He also pointed out that many Main Street investors may be experiencing an increased need for cash and liquidity during this period.