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On July 9 in Boston, SEC Chairman Jay Clayton defended his June 5 broker and adviser rulemaking (Reg BI). The speech was his first attempt to address widespread criticism of these SEC actions.

Yet, instead of explaining to investors in plain language the actual meaning of the rulemaking and how it meets “reasonable investor expectations,” the chairman used most of the speech to go after critics.

He said much of that criticism is “false, misleading, misguided.” Indeed, it was so bad and so meritless that this criticism provides even more proof that the SEC got it right:

Some of this commentary has, in my view, shown a lack of understanding of the law and legal obligations of financial professionals, both before and after adoption of our rulemaking package. This has only further solidified my view that our actions were timely and appropriate, and will ultimately benefit retail investors and our markets.

His speech was a stunning attempt to dismiss out of hand critics of the rulemaking. It was a public dressing down of serious commenters from respected organizations. The AARP, Consumer Federation of America, Investment Advisers Association, CFA Institute and NASAA have all expressed serious concerns with the proposal or final rule making. Surely, they do not have a “lack of understanding” of the law.

Clayton listed seven “claims” of critics –and then tried to refute each.

The first critic’s claim is that Reg BI “will not do enough to protect retail investors.” His refutation was that Reg BI requires brokers to act in the customer’s best interest and that the BD’s interests cannot be put ahead of the customers. Also, that best interest includes obligations of disclosure, care, conflicts and compliance. Clayton affirmed that “best interest” should not be defined.

Does Reg BI substantially enhance the standard for brokers? Here are three reasons (among several) why it does not.