Remarks to the Small Business Capital Formation Advisory Committee

Thank you, Carla [Garrett]. Good morning and welcome to each of you.[1] It is a pleasure to participate for the first time with the Committee as a Commissioner. But as a longtime SEC staff member, it is great to see some familiar faces today, some going back to the earlier Advisory Committee on Small and Emerging Companies. I also see some new faces and I look forward to working with you.

During my confirmation hearing, I described working with my grandfather on his small produce delivery route in Southern California.[2] I saw firsthand the challenges and obstacles associated with operating a small business, including the need to raise capital. This experience impacts the prism through which I look at small businesses. Small business owners work to grow and prosper every day and they require a stable and predictable regulatory framework for capital formation.

At my last assignment, as a detailee to the Senate Banking Committee, I had the opportunity to review and discuss your recommendations on small business capital formation with my colleagues on the Hill. I can assure you, your work provides helpful ideas for capital formation that receive attention from policymakers.

Some of your recommendations have been included in the draft JOBS Act 4.0 legislation currently being circulated in Congress.[3] For example, your recommendation on qualifying venture capital funds influenced Section 202 of JOBS Act 4.0,[4] while your accredited investor recommendation is reflected in Section 306.[5]

JOBS Act 4.0 also attempts to address concerns regarding the liquidity of Regulation A+ shares in secondary market transactions by preempting state securities laws. However, the North American Securities Administrators Association has expressed concerns with this provision at a Senate Banking Committee hearing last week.[6] I look forward to hearing further discussion about these concerns.

Your advice and recommendations are particularly relevant for financial regulators. Whether it is your recommendation on finders[7] or your recommendation that SPACs remain a viable path for companies to pursue access to public markets,[8] these issues, and others impacting small businesses, are of great interest to me and market participants more generally.

Lastly, I want to commend each member of the committee for the service you render. You play an important role in identifying regulatory obstacles to capital formation. Hopefully, we will soon be able to convene and meet in-person. I look forward to that day. Thank you.