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Opening Remarks to the Investor Advisory Committee

Chair Mary Jo White

April 9, 2015

Good morning and welcome.  Thank you again for making time in your schedules to be here and for all the work you do for the Investor Advisory Committee and the SEC.  Today, I want to give you a couple of updates since your last meeting in February.  And then I will just very briefly touch on some of what lies ahead that I think are of interest to this Committee.

Update on Rulemakings

In March, the Commission adopted rules as required by the JOBS Act to create a new exemption from registration under the Securities Act for offerings of up to $50 million in a 12 month period, which are intended to enhance the ability of small companies to raise capital.  We have come to refer to this rulemaking as Regulation A+, which updates and expands the exemption in existing Regulation A.  In crafting the rules, we sought to both protect investors and address the challenges presented by federal and state securities registration and qualification requirements.  In light of the significant investor protections included in Regulation A+, state registration and qualification requirements were preempted for certain offerings of up to $50 million in an effort to make the exemption more workable.

Importantly, the states will continue to retain their role in certain offerings up to $20 million and issuers will be able to avail themselves of the coordinated review process developed by NASAA on those offerings.  And, the states continue to have their full anti-fraud powers for all Regulation A+ offerings.  As we move forward, the staff will be actively monitoring the implementation and development of the new rules, to assess its impact on capital formation and investor protection.  Staff will report its findings to the Commission, within five years of the adoption of Regulation A+, so that the Commission can consider possible changes to the Regulation A+ offering regime.

Also, in March, the Commission proposed amendments to Rule 15b9‑1, which would require certain active cross-market proprietary trading firms to register with FINRA.  These amendments seek to update the rule and fill a regulatory gap with respect to significant over-the-counter trading by these firms.  This registration requirement should, in my view, help better protect investors and the stability of our markets by requiring this trading to be overseen by both the Commission and the SRO tasked with the primary responsibility of regulating such off-exchange trading.

Going Forward in 2015

As we proceed in 2015, as you know, some front and center priorities are in the market structure and asset management spaces, as well as our disclosure effectiveness initiative and I expect activity in those areas.  The staff is also completing its internal review of the very important definition of “accredited investors.”  On tick size pilot, the Commission has until May 6th to act.

As most of you know from the remarks I made last month on my own behalf, I expect we will be discussing advancing rulemakings to impose a uniform fiduciary duty on broker-dealers and investment advisers under Section 913 of the Dodd-Frank Act and to require a program of third party examinations of investment advisers to increase our exam coverage.

On the mandated rulemaking front, as I said at the end of last year, we will be advancing the remaining Title VII and executive compensation rulemakings under Dodd-Frank Act, including the Section 956 executive compensation rulemaking to be done with our fellow financial regulators.  On the JOBS Act side, adoption of final crowdfunding rules is our last major rulemaking to complete, which is also a priority for 2015.


Let me conclude on that note.  Again, thank you for all of your hard work.

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