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Regulation

SEC Chairman Clayton talks priorities

Jay Clayton

The SEC will look at whether there is securities disclosure overload and seek common ground with the Department of Labor on fiduciary standards, Chairman Jay Clayton said Wednesday at a Chamber of Commerce event in Washington.

On disclosure rules, Mr. Clayton, who took the helm of the Securities and Exchange Commission in May, said: "We tend to throw a lot on our public disclosure system because it can handle it. We have to ask ourselves, are we throwing too much on (and) taking away from our core purposes? More is not always better. I think a key question is" 'What do people read when they make an investment decision?' "

"I don't think we are getting any better disclosure with that increase," said Mr. Clayton, who blamed part of the overload on corporate lawyers like himself. "Are we writing for the investor, or are we writing for the court? I know I wrote for the court a lot. You want to be writing for the investor."

On working with the DOL on fiduciary standards, Mr. Clayton said he is hoping to find common ground. "I think there is enough overlap in our mandates that we can get to a place of clarity," he said. On the role of proxy advisers, Mr. Clayton said there is a tendency to not look at who is bearing those costs. "How much of that cost do (ordinary investors) bear for the views of idiosyncratic shareholders?"

When asked about the debate between active management and indexing, Mr. Clayton said it is "fairly paternalistic to be telling Main Street that indexing is the only way to get things done."

He also said that since coming to the SEC, he has been surprised by the amount of retail fraud that still occurs and said his priority will be protecting what he called "Mr. and Mrs. 401(k)" investors.

"If you want to persuade us at the commission that the way you are looking at the world is the right way of looking at the world, do it through the lens of the 401(k) investor," he said.