Commissioner Lizárraga Criticizes IAC Draft Recommendations on Digital Engagement Practices

SEC Commissioner Jaime Lizárraga criticized the Investment Advisory Committee's ("IAC") draft recommendations on digital engagement practices ("DEPs") that urged the SEC to amend existing rules instead of adopting new ones.

In remarks before the IAC, Commissioner Lizárraga stated that he supported the SEC's proposal on digital engagement practices and challenged claims by the Subcommittee that the proposal would have an adverse impact. Commissioner Lizárraga argued that the recommendations (i) do not "accord due weight to the retail investor perspective" and (ii) "do not adequately acknowledge the current standard of conduct that brokers and advisers must adhere to when interacting with investors."

He emphasized the need to protect retail investors from potential harm caused by DEPs. He also urged the IAC to consider the extensive public input, particularly from retail investors, that informed the SEC's proposal. He added, "I respect the Subcommittee's work, as well as the IAC's statutory independence, but I believe these recommendations need some additional consideration."