Remarks at the Investor Advisory Committee Meeting

Good morning, ladies and gentlemen, and welcome to our first Investor Advisory Committee meeting of the year. Before I make some opening remarks, let me offer 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. Of course, I should also like to acknowledge those of you for whom today marks your final IAC meeting. This Committee has an important mission to give considered input to the Commission. I am grateful for the service that you have given-and for the contributions that you have made.

In just a few moments, your first panel will discuss ways in which we can reduce unnecessary disclosure burdens, which have increased dramatically in recent decades.

At a high level, achieving what I often call the "minimum effective dose of regulation" requires the Commission to follow a few ideals. First is rationalizing. Our rules should be sensible and disciplined, with materiality as our north star. Second, these requirements must scale with a company's size and maturity. Balancing disclosure obligations with a company's ability to bear the burdens of compliance is especially important where Congress has directed the SEC to promulgate a disclosure rule whose costs may fall unevenly or be completely askew. And for newly public companies, the SEC should consider building upon the "IPO on-ramp" that Congress established in the JOBS Act. For example, allowing companies to remain on the "on-ramp" for a minimum number of years, rather than forcing them off as soon as the first year after the initial offering, could provide companies with greater certainty and incentivize more IPOs, especially among smaller companies.

A third theme involves the SEC's tendency to regulate indirectly, or set expectations for, matters of corporate governance through so-called "comply or explain" disclosure requirements. Absent a clear congressional directive, it is not the SEC's role to enforce evolving notions of "best practice" governance standards through what I consider "regulation by shaming." Our mandate is disclosure rooted in materiality, not to enforce governance orthodoxy by embarrassment. These decisions, of course, should be left ultimately to shareholders and their directors to sort out according to the aspects of their company.

Later today, your second panel will then focus on the persistent challenges that publicly offered funds face in obtaining a quorum for shareholder meetings. As retail patterns evolve and the intermediated nature of account structures complicate outreach, attaining that threshold has become more difficult and more costly. The Commission is attuned to these dynamics, and I look forward to the panel's insights on potential avenues for modernization that preserve investor protections.

Finally, the Committee will vote on recommendations regarding the tokenization of equity securities. I want to thank the IAC for engaging thoughtfully with this topic, as well as for your recognition that tokenization can enhance settlement efficiency, reduce settlement risk, and eliminate unnecessary intermediaries.

As I have previously discussed, I expect the Commission to soon consider an innovation exemption to facilitate limited trading of certain tokenized securities with an eye toward developing a long-term regulatory framework.[1] To help inform our work in this area and to provide for robust public input, our Crypto Task Force has hosted several roundtables, met with hundreds of market participants, solicited broad public feedback, and received scores of written input submissions over the past thirteen months on how best to calibrate our rules to new and novel types of trading.[2][3][4]

We continue to welcome comments on the design of a potential innovation exemption, which would be limited in time and scope, but long enough so that we can craft more durable rules that harness the full potential of these new technologies.

With that, I want to close where I began, which is by thanking you for your service on this Committee-especially our departing members. Your work here has been careful and rigorous. You have given the Committee the benefit of your experience, with the interests of investors foremost in your minds. And I know that while public service of this kind rarely draws headlines, it very much strengthens the foundations on which our markets depend. So, each of you has my sincere thanks-and best wishes for today's meeting and in the endeavors that lie ahead. Thank you.