Reacting, in part, to a recent statement by banking regulators regarding the role of guidance in their regulatory regimes, Securities and Exchange Commission Chairman Jay Clayton has clarified his own views on the topic.
When promulgating rules and regulations, the Commission’s staff frequently make their views known through a variety of communications, including written statements, compliance guides, letters, speeches, responses to frequently asked questions and responses to specific requests for assistance, Clayton explained.
“The staff often addresses specific questions from particular SEC-regulated institutions or other stakeholders about Commission rules or regulations and how those rules or regulations may apply to a particular entity’s specific facts and circumstances,” he said. “The Commission’s longstanding position is that all staff statements are nonbinding and create no enforceable legal rights or obligations of the Commission or other parties. Statements issued by SEC staff frequently include a disclaimer underscoring the important distinction between the Commission’s rules and regulations, on the one hand, and staff views on the other.”
As the SEC carries out market oversight functions, “it should keep this important distinction in mind,” Clayton added. Recently, he instructed the directors of the Division of Enforcement and the Office of Compliance Inspections and Examinations “to further emphasize this distinction to their staff.”
“More generally, our divisions and offices will continue to review whether prior staff statements and staff documents should be modified, rescinded or supplemented in light of market or other developments,” he said. “Public engagement on staff statements and staff documents is important and will assist the Commission in developing rules and regulations that most effectively achieve the SEC’s mission. I encourage such engagement, with the recognition that it is the Commission, and only the Commission, that adopts rules and regulations that have the force and effect of law.”
Clayton further emphasized his views during opening remarks at Thursday’s meeting of the SEC Investor Advisory Committee.
“SEC staff views are nonbinding and create no enforceable legal rights and obligations,” he said, noting an “ongoing effort by our divisions and offices to review prior staff statements and documents and consider whether they should be modified, rescinded or supplemented in light of market or other developments.”