Good morning and thank you Chris, as well as the other members of the Committee, for your time and input today.[1]

I look forward to hearing the discussion on our exempt offering framework under Regulation D and the Accredited Investor Definition.

These topics always spur a healthy debate on how we can both promote capital formation while also preserving strong safeguards to protect investors.

As all of us have heard before, the gap in capital raised in private versus public markets is significant.

And there are real questions about how protected retail investors are when they do participate in private markets.

• Are they relegated to the end of the line when it comes to disclosures, reliable financial information, and liquidity?
• Is it an insider’s game that favors large players over retail investors who aren’t repeat players, don’t write large checks, and generally just have less leverage?

This committee can help us address these questions, which point to the need for more data and greater visibility into these markets.

On the accredited investor definition, we see a similar dynamic – both the need to protect investors, while also ensuring they have access to investment opportunities.

Income and wealth thresholds are not the sole measure of financial sophistication. I welcome the discussion on whether the accredited investor qualifications remain fit-for-purpose.

Many investors who may not have a high net worth can have extensive knowledge of various financial investments and the risks they entail.

However, it’s important to bear in mind that income and wealth thresholds also protect retail investors, because they are a measure of how well an investor can withstand market losses or liquidity pressures.

Unlike in public markets, retail investors in private markets do not have access to up-to-the minute, reliable information on prices of securities.

According to the U.S. Census, in 2022, median household income was $75,000. Given the paycheck-to-paycheck realities that millions of working families in our country face, even those with six figure salaries, it is important that we remain cognizant of this, as well as our duty to protect investors.

Finally, I would like to commend the Committee’s work on the draft recommendation on Human Capital Management disclosure.

The discussion on investor demand for such metrics merits attention. That said, the ways in which the principles-based approach taken by the Commission in 2020, while a good step forward, still falls short of the baseline, decision-useful information that investors are demanding.

We can build on the 2020 foundation with quantitative metrics that will give investors the standardized, comparable information needed to properly evaluate companies’ market value.

In addition to measures on headcount, turnover, and labor costs, the draft recommendation notes the importance of workforce demographic data, which can allow for: “investors to understand the company’s efforts to access and develop new sources of talent, and to evaluate the effectiveness of these efforts. Employees are a key source of value, and investors need to understand companies’ efforts to identify and develop new sources of talent.”

Well put.

Under current practice, companies with more than one hundred employees already submit EEO-1 forms that track much of this demographic information.

It would not be a heavy lift for companies to also provide this information to investors.

Overall, the Committee’s discussions today will be very informative, and I look forward to learning from all of the views presented.

Thank you again for your service and for your contributions to today’s discussion.