SEC Chair Affirms That Staff Statements Are Non-Binding

SEC Chair Jay Clayton confirmed the SEC's "longstanding position" that staff statements to SEC-regulated institutions or stakeholders regarding rules or regulations are non-binding.

In a statement, Mr. Clayton clarified the distinction between SEC rules and regulations, which have the full force and effect of law, and staff views, which do not create enforceable legal rights or obligations. Mr. Clayton stated that he has instructed certain SEC directors to emphasize this distinction to their staff. Additionally, Mr. Clayton affirmed that SEC divisions and offices will continue to modify, rescind or supplement prior staff statements "in light of market or other developments."

Commentary / Steven Lofchie

The SEC Chair's statement regarding staff pronouncements comes immediately on the heels of a collective statement by the bank regulators that regulatory guidance does not have the force of rule. See Banking Regulators Say Supervisory Guidance Is Not a Basis for Enforcement Actions. This does not look coincidental. Perhaps this is part of coordinated effort to bring the exercise of regulatory agency authority into the control process that is required by law. By way of example, the CFTC's issue of "guidance" on the application of the CEA to cross-border swap transactions, without going through a formal...