Statement Summary
In a recent address, SEC Chairman highlighted the importance of competition among states and markets in fostering economic growth, particularly in the Southeast U.S., known as the Boom Belt. He emphasized that adherence to foundational principles is crucial for attracting investment and sustaining prosperity. The SEC aims to revitalize public markets by:
- Streamlining disclosure requirements
- Allowing states to manage corporate governance
- Providing litigation alternatives to safeguard against frivolous claims while protecting investor interests
These initiatives are designed to reduce regulatory burdens and ensure that the SEC remains focused on its mission to prioritize investors. The speech underscored the need to learn from the success of the Boom Belt and reaffirm foundational values that drive American innovation and prosperity.
Original Statement
Thank you very much, Jim [Lee], and good morning, ladies and gentlemen. Governors Abbott and DeSantis, I am grateful to share the stage with you. And to Messieurs [Jim] Esposito and Lee, I thank you for the perspectives that you have shared and for the example that you have set.
First principles have very clearly found fertile ground here in Florida. And at its core, I believe that the momentum taking place across the Boom Belt reflects a deeply American idea: that competition—among firms; among markets; and yes, among States—is the animating force behind a system that has produced more prosperity than any other in human history.
Competition, as I noted recently in Texas, does not pause for tradition, nor does it defer to legacy jurisdictions. Over time, it compels systems, and States, to adapt—or to yield. Through competition, good ideas spread, poor ones fade, and the system itself grows stronger.
We need not look any further than the Boom Belt for a better example. The eleven states that span the Southeast are outpacing every other American quadrant across the measures that matter most, among them gross domestic product, population growth, job creation, foreign investment, and private market activity.
When capital, companies, and people all move in the same direction—with that kind of consistency, and at that kind of scale—it behooves us to ask why. I believe that the answer, more often than not, is the region’s steady adherence to first principles, including those that rigorously protect investors without needlessly paralyzing companies.
So, for our part, the SEC is returning to those same principles by renewing the conditions that make our public markets the natural destination for companies to raise capital and for investors to share in their success.
For context, decades of accretive rulemakings and regulatory adventurism have made the path to becoming a public company narrower—and the experience of remaining one encumbered with rules that can introduce more friction than benefit. It is little surprise, then, that shortly after I left the SEC back in the mid-1990s as chief of staff, there were more than 7,800 companies listed on the U.S. exchanges—and by the time that I returned last year as Chairman, that figure had fallen by roughly 40 percent. This trajectory tells a cautionary tale that we are working to rectify through the three pillars of my plan to make IPOs great again.
First, we are modernizing, rationalizing, and streamlining disclosure reports so that they are meaningful, understandable, and not a repellant to investors. Too many SEC requirements that began as a framework to inform have become instruments to obscure—drifting along the way from what a reasonable investor would consider important to what a regulator might find interesting. That is completely opposite of what should be the case since we are commanded by law to put the investor first.
Our disclosure regime is most effective when the SEC provides the minimum effective dose of regulation necessary to elicit the information that is material to investors, and we allow market forces—not the regulator—to drive the disclosure of any additional aspects that may be beneficial. Materiality, in short, must reclaim its place as the SEC’s north star.
Second, as part of the three pillars of making IPOs great again, we are focused on ensuring that States, and not the SEC, regulate matters of corporate governance. Over time, the agency has used its disclosure authority to attempt to indirectly establish governance standards that state corporate law should and can address. We must stay in our lane as a disclosure agency and not be a merit regulator.
Third [pillar], and finally, we are allowing public companies to have litigation alternatives while maintaining an avenue for shareholders to continue to bring forth meritorious claims. At the SEC, we have been hard at work on executing this plan so that we can shield the innovator from the frivolous—and protect the investor from the fraudulent.
Taken together, these reforms represent something larger than a regulatory agenda—indeed, they herald the SEC’s return to first principles that have made this region’s ascent so remarkable. In many ways, the Boom Belt embodies the best of what we are working toward in Washington. And guided by your example, we are reminded that the most consequential reforms are not those that add to the compliance burden, but those that have the courage to lift it.
So, I am grateful, once again, for the opportunity to be part of today’s program. I look forward to engaging with you in the work that we have discussed today. And above all, I thank you for your faith in what this country can achieve when it remembers the principles that, in this 250th anniversary of the United States, made it great. Thank you.
