Remarks Before the Small Business Capital Formation Advisory Committee

Thank you Carla [Garrett] and all committee members. It’s good to be with you again. I appreciate the members’ continued willingness to volunteer their time to represent the interests of small businesses.

I’ll keep my remarks brief today.

Today’s agenda includes an overview of our small business advocacy team’s 2021 annual report. The report provides a deep dive into the data on what’s happening with capital raising, from early start-ups to small cap companies. I encourage everyone to take a look at the report, as well as the new educational resources on Capital Raising hub website. We welcome your feedback.

Your agenda also includes a discussion of the financial thresholds in the accredited investor definition.

The accredited investor definition plays a central role in our regulations. Private issuers that limit their sales to accredited investors are able to raise unlimited money in a private offering without having to register those securities or otherwise comply with the full range of regulations designed to promote market transparency and integrity, the efficient allocation of capital, and the protection of investors.

The accredited investor definition is intended to identify investors that do not need the protections that apply in registered offerings. This definition was first adopted in 1982 and revised in 2020.

It is essential, not just for investor protection, but also for the health of our markets, that we continue to think about this definition.

This Committee offered recommendations on accredited investor to the Commission back in 2019. I will be interested to hear if there are any changes to those recommendations and any additional context you may suggest we consider.

I thank members for volunteering your time to provide us your expertise and perspectives, and I look forward to the readouts from today’s discussions. Thank you.