The Securities and Exchange Commission has no plans to delay its controversial Regulation Best Interest (Reg BI) rule despite the impact the ongoing coronavirus pandemic has had on U.S. markets.

SEC Chairman Jay Clayton said in a statement Thursday that the June 30 compliance date for Reg BI and other requirements, most notably the filing of Form CRS in conjunction with the new rule, “remains appropriate.”

“Over the past ten months, the Commission and the staff have engaged extensively with broker-dealers, investment advisers, retail investors and other market participants, as well as FINRA (Financial Industry Regulatory Authority) and other regulatory partners, regarding the implementation of Reg BI and Form CRS,” stated Clayton. “We believe firms with account relationships comprising a substantial majority of retail investor assets have made considerable progress in (1) adjusting their business practices, (2) supplementing and modifying their policies and procedures, and (3) otherwise aligning their operations and preparing for the requirements of Reg BI and the obligation to file and begin delivering Form CRS.”

Reg BI is intended to enhance the quality and transparency of retail investors’ relationships with investment advisers and broker-dealers, bringing the legal requirements and mandated disclosures in line with reasonable investor expectations while preserving access (in terms of choice and cost) to a variety of investment services and products.

Under Reg BI, broker-dealers will be required “to act in the best interest of a retail customer” when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer. It is designed to enhance the broker-dealer standard of conduct beyond existing suitability obligations and make it clear that a broker-dealer may not put their financial interests ahead of the interests of a retail customer when making recommendations.

Form CRS requires SEC-registered investment advisers and SEC-registered broker-dealers to deliver to retail investors a brief customer or client relationship summary that provides information about the firm. The relationship summaries must then be filed with the SEC.

Reg BI has received its fair share of criticism since it was adopted in June 2019. States have sued the SEC over the rule, Democrats in the House passed legislation in an attempt to starve it of funding, and notable politicians and organizations have filed with the court pleading to set the rule aside.

Throughout the criticism, Clayton has vehemently defended the rule. In his Thursday statement, he shared his belief Reg BI is more important now than ever given the circumstances brought by COVID-19.

“At any time, and particularly in times of uncertainty, investment professionals should not put their interests ahead of the interests of their clients and customers,” Clayton stated. “Reg BI codifies this fundamental principle.”

Clayton notes firms should continue to make good-faith efforts to ensure compliance with the rule by June 30, but if there are disruptions caused by the coronavirus affecting those efforts, they should engage with the SEC for support.

“I expect that the Commission and the staff will take the firm-specific effects of such unforeseen circumstances (and related operational constraints and resource needs) into account in our examination and enforcement efforts,” said Clayton.

Clayton adds SEC staff, all of which is teleworking during the pandemic, is working closely with FINRA to ensure consistency in overseeing compliance with Reg BI, and that the Commission continues to welcome engagement from investors and other market participants on implementation. The SEC’s Office of Compliance Inspections and Examinations later issued two Risk Alerts to provide additional information.