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Remarks before the SEC Advisory Committee on Small and Emerging Companies

Chair Mary Jo White

Oct. 5, 2016

Thank you, Steve and Sara, and good afternoon everyone. I won’t hold up your agenda, but I did want to stop by to express my appreciation for your being here again to share your experience and perspectives with us. Your efforts provide the Commission and staff with critical and unique input about matters of importance to small and emerging companies. Your agenda is always of great interest to me — and today’s is on four areas that are particular priorities for me.

You began the day discussing the disclosure requirements in Regulation S-K on which the Commission and staff are closely focused and I look forward to receiving a full briefing from the staff on your discussion from this morning. Today’s agenda also includes a discussion about diversity on corporate boards. As you know, this issue is also very important to me and should be very important to companies as well. As a former member of a public company board and its audit committee, I have seen first-hand what the research is telling us — boards with diverse members function better and are correlated with better company performance. This is precisely why investors have — and should have — an interest in diversity disclosure about board members and nominees.

Steve Luparello, our Director of the Division of Trading and Markets, is about to update you on some of our equity market structure work and will be specifically discussing the staff’s perspective on the issue of finders and other intermediaries in small business capital formation transactions. He will also give you a brief update on the tick size pilot, which just started this week, to help us assess the impact of tick sizes on market quality for smaller companies. After a lot of hard and painstaking work, I am very pleased that the pilot has been launched. Whatever the data from the pilot ultimately yields, it is reflective of our appreciation that our market structure should promote capital formation for smaller companies, and that one market structure may not fit all companies.

And finally, I want to thank the members of the Committee for your continuing ideas and suggestions on ways to help more small companies become familiar with the different avenues available for raising capital in the securities markets. I, together with staff in DERA and Corporation Finance, am following this priority area very closely, including how the new Regulation A+ and Regulation Crowdfunding options are being used. Capital formation by small businesses obviously plays a vital role in our economy, so it is important for businesses to know about all of the tools available to them, how they might work for them, and how to use them optimally.

Thank you again for your service on this Committee and, for your continued dedication and hard work for small businesses.