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Remarks to the SEC Government-Business Forum on Small Business Capital Formation

Commissioner Michael S. Piwowar

Nov. 19, 2015

Thank you, Keith [Higgins], for that introduction. Last month, I visited a number of cities in Asia to meet with fellow regulators, business groups, and other market participants. One topic of significant concern was how to facilitate the creation and success of small and medium-sized enterprises (SMEs). Many of the meeting participants recognized that an economy conducive to SMEs was an important factor for innovation, business development, and jobs creation. They expressed admiration for the Silicon Valley-like culture that not only fosters new start-ups, but rapidly grows the successful ones. They asked many questions as to how they might replicate that environment in their own jurisdictions.

One of the key topics in those discussions was the Commission’s implementation of the Jumpstart Our Business Startups Act (JOBS Act). Since this Forum last convened a year ago, the Commission has taken a number of steps to fully implement the JOBS Act. First, at the end of October, we adopted final rules for crowdfunding. Second, in March, we adopted final amendments to Regulation A. Third, last December, we proposed amendments to revise rules adopted under Section 12(g) of the Securities Exchange Act to reflect the new, higher thresholds for registration. In addition, in a matter not mandated by the JOBS Act, the Commission proposed rule amendments to facilitate intrastate and regional securities offerings last month.

Today’s agenda calls for discussion of post-JOBS Act implementation of both exempt and registered offerings. I hope that the morning discussions will help stimulate ideas that can be used during the afternoon breakout session to develop recommendations. Those recommendations are reviewed by many people, including members of Congress, who are looking for ideas as to how to further improve the regulatory environment for small business capital formation. In fact, yesterday at the House Financial Services Committee hearing examining the SEC’s agenda and budget, Congressman Scott Garrett (R-NJ), Chairman of the Capital Markets Subcommittee, said in his opening statement “Tomorrow, the SEC will…hold its annual Government-Business Forum on Small Business Capital Formation. As in previous years, I expect this forum to produce a number of valuable ideas that would help small enterprises access capital and grow our economy. And as in previous years, I expect the vast majority of these recommendations to be promptly ignored by the SEC.”[1]

Given your tremendous efforts to develop thoughtful recommendations, I believe that the Commission should respond to each one. By statute, the Commission is required to respond to each recommendation provided by the Investor Advisory Committee. It should not take a law to require the Commission to respond to the Forum’s recommendations – it is more of a matter of common courtesy and good government.

Thank you for giving up your time and spending your money to join us in Washington, D.C. today. As I mentioned in my remarks last year, I hope that we consider alternating the venue of this Forum with locations elsewhere in the country to maximize inclusiveness in these discussions. I would also like to thank our staff from the Office of Small Business Policy as well as the individuals who were part of the planning group for organizing the Forum.

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