Statement Summary
In a recent address, SEC Chairman emphasized a transformative year for the agency, focusing on its core mission: protecting investors, maintaining fair markets, and facilitating capital formation. He highlighted the issue of excessive regulations that have complicated the market landscape and hindered innovation, especially in the digital assets sector. The SEC is working to modernize its regulatory frameworks and clarify jurisdictional lines, particularly through collaborations with other regulatory bodies, such as the CFTC.
Chairman's "A-C-T" strategy aims to adapt regulations, clarify jurisdiction, and simplify the SEC rulebook to encourage capital formation and boost the number of public companies. He underscored the importance of aligning regulations with economic materiality to foster a fair environment for investors and entrepreneurs. Looking ahead, the SEC intends to facilitate smoother IPO processes and keep up with market innovations while robustly enforcing investor protections.
Original Statement
Good morning, ladies and gentlemen. David, thank you for your warm words of introduction and for the invitation to join you here at the Economic Club of Washington. Like much of the Club’s membership, your career has been animated by a sense of great civic purpose. And you are no stranger as to how regulatory issues affect the marketplace. So, it is a special pleasure to be with you, and I look forward to our conversation in just a few moments.
Of course, I should also like to thank the market participants and business leaders who are here today, as well as my counterparts from across the Administration. I am grateful for your presence this morning, and for your partnership in the work that we share.
Finally, before I offer a few reflections, let me note the customary disclaimer that the views I express here are my own as Chairman, and not necessarily those of the SEC as an institution or of the other Commissioners.
As David mentioned in his opening comments, today marks one year since I began my third tour of duty at the SEC. I first served on the staff of Chairmen Richard Breeden and Arthur Levitt in the early 1990s, and then later as a Commissioner in the Aughts. Taken together, those experiences have shaped how I approach my role as Chairman—and how I understand the SEC’s place within our broader financial system.
Those experiences also provide a vantage point from which certain patterns come into focus, among them how Washington has a way of standing athwart innovation and capital formation. How layers of regulation can accumulate without regard to their cost or consequence. How complexity, once introduced, seldom recedes.
Indeed, over the years, the SEC’s rules have multiplied faster than the problems that they were intended—or purported—to solve. Our requirements have tended to grow in scope without a commensurate gain in clarity or effectiveness. And the cumulative effect of the Commission’s losing its focus on economic materiality as its guiding light has been to introduce friction where entrepreneurs depend on clarity, and uncertainty where markets rely on confidence.
Core Mission and Regulatory Framework
So, it was against this backdrop one year ago that I stood beside President Trump in the Oval Office to say that it is time for the SEC to end its waywardness. Today, I am pleased to report that we have.
One year ago, I said that we must return the agency to the core mission that Congress set for it. We did. I called on the Commission to provide a firm regulatory foundation for digital assets. We are well into that process – and collaborating with our fellow regulators and Congress.
Above all, I urged my colleagues at the SEC to strive to ensure that the U.S. remain the best and most secure place in the world to invest and do business. And we will do that.
In short, one year ago, I declared that it is a new day at the SEC. I meant it then. And I can speak to it now.
A-C-T Strategy
First, though, to appreciate the magnitude of the gains that we are making, I think that it is instructive to contextualize them in the years of regulatory adventurism that they follow. Congress tasked the SEC with three mutually reinforcing aims, which are to protect investors; to maintain fair, orderly, and efficient markets; and to facilitate capital formation. This, our statutory mission, is clear in its design and precise in its scope.
Yet in recent years, as I just alluded to, the Commission constructed around those core pillars a thicket of obligations that were unmoored from any of them, precipitating a disclosure regime that had been hijacked to serve interests beyond those of investors; an enforcement program that had become a de facto instrument of our rulemaking function; and a path to going public that had grown so costly, so litigious, and so politically fraught that an untold number of entrepreneurs understandably chose to remain private or to list elsewhere.
The agency charged with stewarding the world’s greatest capital markets had become, in many respects, an imposing obstacle to them.
The answer to that is what I am calling our A-C-T strategy, which rests on three distinct, but interlocking pillars to: Advance our regulatory frameworks into the modern era, Clarify our jurisdictional lines, and Transform the SEC rulebook by returning it to first principles.
Every initiative toward which the SEC is working—every rule that we propose, every interpretation that we release, and every institutional reform that we undertake—largely falls into at least one of those three categories.
Modernizing Regulatory Frameworks
As I have stated, to advance our regulatory posture is to bring it into honest alignment with the world as it is, rather than as it was when many of our rules were first written. After all, innovation rarely pauses for regulation. And perhaps nowhere has the cost of failing to keep up been more apparent than in the agency’s treatment of crypto assets.
Under the previous administration, innovators found that engaging with the SEC often relatively quickly gave way to getting investigated by it. Well, the market rendered its verdict on that approach. And it did so in the form of migrating toward perceived friendlier jurisdictions offshore. An entire generation of digital asset innovation developed outside of the United States, not because American entrepreneurs lacked the ambition, or American investors lacked the appetite, but because American regulators lacked the will.
So, over the past year, this SEC has moved decisively on President Trump’s goal of making America the crypto capital of the world. Building on and broadening the great work of our own Crypto Task Force, I launched Project Crypto to modernize the securities rules and regulations to facilitate markets’ moving on-chain.
Most recently, we delivered long-overdue clarity by publishing a crypto-token taxonomy that distinguishes between five categories of digital assets, four of which are not securities. And we are on the cusp of releasing what I call an “innovation exemption”, which will provide market participants with a cabined framework to begin facilitating the trading of tokenized securities on-chain in a compliant fashion as the Commission works toward long-term rules of the road.
Conclusion
Of course, while modernizing the agency’s frameworks has come to define our approach to crypto, it is scarcely limited to it. I think also of the reforms that we have pursued to enable ETF share class structures for mutual funds—a change that could save taxpayers billions—as well as a new Cross-Border Task Force that targets those who seek to use international borders to evade and undermine U.S. investor protections. Markets are global. I believe that investor protection must be as well.
Looking ahead, I am eager for the Commission to propose rules that execute my Make IPOs Great Again agenda. For proposals in the near term, I have instructed the Commission staff to evaluate the following ideas: (1) adopting a regulatory IPO “on-ramp” that supplements the concept that Congress designed in the JOBS Act; (2) expanding the existing accommodations that are currently available only for emerging and smaller companies to more businesses; (3) providing nearly all public companies with an easier path to “shelf registration,” which allows them to access the public markets quickly and when market conditions are ideal; and (4) giving companies the optionality for a quarterly or semiannual regulatory filing cadence.
Now, the strides that I have described this morning, substantial as they are, are by no means exhaustive. Nor are they complete. Instead, the progress that we are making across every dimension of our mandate amounts to an initial dividend of an SEC that has regained its footing—and is moving forward with equal parts rigor and restraint.
By rejecting the institutional drift that the previous administration had normalized, I am pleased to report that we are recalibrating the agency in line with its statutory mission. An aggressive rulemaking agenda in the coming year, meanwhile, will build on the work that we have begun at an auspicious moment.
Indeed, with the approach of America’s 250th anniversary, I believe that our capital markets must continue to reflect our national character. They must continue to lead the world in their depth, in their dynamism, and in their capacity to translate ingenuity into prosperity. That is the promise that our markets have long represented. And now, in this new era at the SEC, that is the promise that I am confident they will continue to keep.
So, thank you all very much for your time and attention today. You have been a patient and indulgent audience. And David, I now look forward to discussing this progress with you in greater detail. Thank you.
