Statement Summary
The SEC Chairman addresses the need for U.S. and European collaboration to enhance capital markets and promote economic growth. He emphasizes the SEC’s commitment to protecting investors and facilitating capital formation, while highlighting changes in foreign company regulations and the rise of digital assets. The SEC is considering updating its standards for foreign companies accessing U.S. markets, aiming for a level playing field and better investor information. As the crypto landscape evolves, the SEC plans to create a supportive regulatory framework to foster innovation in financial technology without stifling growth. The Chairman advocates for high-quality accounting standards and efficient regulations focused on financial materiality, urging international cooperation to ensure robust and dynamic markets for future prosperity.
Original Statement
Good afternoon, ladies and gentlemen. First, I should like to thank you, Secretary-General Cormann, for your warm introduction. Thanks also to Carmine for the invitation to participate in this inaugural roundtable and for having organized such a timely conversation on the ways in which we can work together to encourage global competition in the capital markets and to promote economic growth in our respective jurisdictions. I know that all of you are committed to these goals, as is demonstrated by your presence here today. It is my very special pleasure to be with you, especially as we at the Securities and Exchange Commission are returning to our core mandate of protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation.
Now, before I go further, I am sure that you appreciate that the views I express here are my own and do not necessarily reflect those of the SEC as an institution or of my fellow Commissioners. But for me, returning to France is a homecoming of sorts. In the late-1980s, I was a young lawyer in the Paris office of a New York law firm, learning as much about the intricacies of international finance as the enduring value of cooperation across cultures. In the decades since, multiple tours of duty at the SEC have further underscored to me how the principles we prize in the United States, among them the might of free enterprise and the vigor of capital markets, can find common cause abroad. And it is in that spirit that I welcome today’s discussion on fueling growth and opportunity across our domestic economies.
Collaboration and Market Access
The topic of American and European collaboration is one that has fascinated me for many years. I remember well the run up to the “Big Bang” of 1992, which gave rise to the European single market—and to the sweeping tides of opportunity that would follow. For those of us who were here at the time, it was invigorating to watch the Internal European Market take shape, animated by the forces of commerce and competition—themes that are again in focus today as Europe considers the direction of the Savings and Investment Union, among other initiatives. At the same time, engagement outside of the new European market remained important, even for a continent knit more closely together. And of course, strong, sovereign nations like the United States must continue to work constructively with the world in ways that promote our prosperity.
At the SEC, these priorities find expression in our work to attract foreign companies to U.S. markets and provide Americans with the opportunity to invest in those companies while ensuring that U.S. and foreign firms experience a level playing field—and our investors are protected. Of course, the size and depth of the U.S. capital markets have been and still are attractive to non-U.S. companies. They can achieve a variety of potential benefits, including higher valuation, greater liquidity, access to American capital, and enhanced publicity and reputation in the financial markets.
Regulatory Updates and Investor Protection
Since the advent of the SEC, our rules have granted special accommodations for foreign companies that access the U.S. capital markets. These accommodations recognize the differences in business and market practices, accounting standards, and corporate governance requirements, among other matters, between U.S. and foreign companies. Still, the SEC has also been mindful of the need for U.S. investors to be equipped with adequate information about the foreign issuers and the extent to which such information was provided under the laws of their home country jurisdictions.
In 1983, the SEC developed the foundations of its current standard for which foreign companies qualify for these special accommodations. Since then, the SEC has reassessed and updated this standard as needed to address changes in the global markets and to protect U.S. investors. In one of my first actions as Chairman, I asked the Commission to approve the issuance of a concept release to gather public feedback on whether this standard should be updated to reflect the evolution in financial markets and corporate legal structures.
The concept release seeks public feedback on whether foreign companies listed in the United States should be subject to additional conditions—such as a minimum foreign trading volume or listing on a major foreign exchange—for them to receive accommodations not available to U.S. companies. To be clear, the SEC welcomes foreign companies that seek to access the U.S. capital markets. The concept release is not a signal that the SEC intends to disincentivize such firms from listing on U.S. exchanges. Rather, our goal is to better understand the impact on U.S. investors and the U.S. market resulting from significant changes to the population of foreign companies listed in the United States over the last two decades.
High-Quality Standards and Financial Materiality
As we look with fresh eyes at the types of foreign issuers that receive special accommodations, we should also not lose sight of the bedrock beneath any effective regulatory regime: high-quality accounting standards and financial materiality. With respect to accounting standards, U.S. companies must prepare their financial statements in accordance with U.S. GAAP, or Generally Accepted Accounting Principles. During my previous tenure at the SEC as a Commissioner in 2007, I voted to support rule changes to permit foreign companies to present financial statements prepared in accordance with the International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), without reconciliation to U.S. GAAP.
When the SEC eliminated the reconciliation requirement, it noted that “the IASB’s sustainability, governance and continued operation in a stand-alone manner as a standard setter are significant considerations in eliminating the reconciliation requirement, as those factors relate to the ability of the IASB to continue to develop high-quality globally accepted standards.”
In 2021, the IFRS Foundation announced the formation of the International Sustainability Standards Board (ISSB), and its Trustees are now responsible for securing funding for both the IASB and the ISSB. This recent expansion of the IFRS Foundation’s remit cannot divert its focus from its long-standing core responsibility of funding the IASB. In turn, the IASB must promote high-quality accounting standards that are focused solely on driving reliable financial reporting and are not used as a backdoor to achieve political or social agendas. Reliable financial reporting is critical to supporting capital allocation decisions.
Digital Assets and Innovation
As we call on our partners to foster investor confidence and dynamic markets in their jurisdictions, these same priorities compel us, in the United States, to unleash the potential of digital assets in ours. It seems only fitting, here just steps from Avenue Victor Hugo, to summon his words to our moment, “on résiste à l’invasion des armées; on ne résiste pas à l’invasion des idées”—an invasion of armies can be resisted, but not an idea whose time has come. And today, ladies and gentlemen, we must admit that: crypto’s time has come.
For too long, the SEC has weaponized its investigatory, subpoena, and enforcement authorities to subvert the crypto industry. That approach was not only ineffective, but injurious; it drove jobs, innovation, and capital overseas. American entrepreneurs bore the brunt—and have been forced to spend fortunes on building a legal defense instead of a business. That chapter belongs to history.
It is a new day at the SEC. Policy will no longer be set by ad hoc enforcement actions. We will provide clear, predictable rules of the road so that innovators can thrive in the United States. President Trump has tasked me and my counterparts across the Administration with making America the crypto capital of the world—and the President’s Working Group on Digital Asset Markets has delivered a bold blueprint to guide us in these efforts.
As Congress drafts comprehensive legislation, the Working Group has directed U.S. regulators to move swiftly toward modernizing our outdated rulebooks. At the agency, we are delivering on this mandate through Project Crypto, a sweeping initiative to modernize the securities rules and regulations to enable our markets to move on-chain. Our priorities are clear: we must provide certainty regarding the security status of crypto assets. Most crypto tokens are not securities, and we will draw the lines clearly.
Conclusion
In closing, with your partnership, we can shape future regulatory initiatives so that they fulfill their intended function of protecting investors while preserving plentiful room for innovators and entrepreneurs to thrive. As I stated earlier, it is a new day at the SEC as we realign the agency’s enduring principles with emergent possibilities. I am confident that international cooperation in the regulatory matters I have discussed will benefit all of us in the long run, across the United States and around the globe. And I look forward to engaging in this work together, with the resolve worthy of the opportunities before us.
Merçi, Mesdames et Messieurs, de votre attention et je vous souhaite un bon après-midi.
