This is the SEC's second statement cautioning investors on the SEC's inability to fully oversee and regulate disclosures made by emerging market issuers, but most importantly as to Chinese issuers. See also . While the SEC may not be able to pursue Chinese issuers, it can bring enforcement actions against any broker-dealer or investment adviser that puts its clients into such issuers without adequate diligence.

The regulators are in a tough position. Not only is the pandemic news bad for many municipal issuers, the prognosis may be worse. Further, as SEC Chair Clayton and Director Olsen observe, the "municipal securities market is dominated by retail investors," largely because of the tax benefits provided to taxable holders of municipal securities (i.e., many investors in the municipal securities markets are not sophisticated and are the types of investors most in need of protections).

How…

The GAO recommendations illustrate trade-offs inherent in many regulatory decisions. For example, the more demanding that regulators are as to AML reviews (and the tougher the punishments for AML failures), the more likely it is that a bank will determine not to do business with legitimate businesses. That is, banks will limit their exposure if they determine they cannot readily obtain information that insulates them from regulatory risk.

The MSRB proposal aligning its rules with Regulation Best Interest is analogous to recently proposed . In both cases, the SEC's takeover of much of the regulation on suitability substantially diminishes the role of the self-regulatory organizations as conduct arbiters.