Keynote Remarks at The Economic Club of Washington

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.

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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.

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.

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 - A, clarify our jurisdictional lines - C, and transform the SEC rulebook by returning it to first principles - T.

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.

So let me now take each in turn.

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Advance

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.

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.

Advancing our regulatory posture also compels us to follow the capital flow as more of it finds its way into the private markets-a natural result of the heavy-handed regulation that forced banks to get out of the business of financing small and growing enterprises.

The SEC is closely monitoring both the lending gap that private credit has filled and the emerging pressures that it has experienced, including elevated redemption requests and rising default-rate projections. Let me be clear that opacity in this space can be an issue. That valuation, transparency, and credit quality are key. That higher fees and less liquidity must be taken into account regarding the appropriateness of an investment. And that our aim, along with that of our colleagues in the federal government, is for a wider group of investors, guided by their fiduciaries, to be able to participate in broader, diversified investment choices with the information and guidance that they need to make sound decisions, with reasonable safeguards in place.

Clarify

Now, the SEC's advancement of modernized rules is only as useful as the clarity with which we apply them.

So, after decades of subjecting innovators to fragmented oversight and overlapping authorities, CFTC Chairman Mike Selig and I signed an historic Memorandum of Understanding last month between the two agencies. The MOU aligns key definitions, clarifies jurisdiction, and co-ordinates oversight in areas of shared interest, including digital assets.

Having interacted with both agencies now for three decades, I have seen up close how jurisdictional ambiguity can stifle innovation just as surely as ill-devised regulation. So, I hope that soon gone will be the days of forcing dually registered firms to navigate divergent processes. Instead, by aligning regulatory definitions; co-ordinating oversight; and facilitating secure data sharing between the two agencies, we are replacing a regulatory no-man's-land-that barren place where the wreckage of would-be financial products lay for too long-with fertile ground for innovation to take root and flourish.

Transform

Finally, the third pillar of our "A-C-T" strategy is to transform our rulebook by trimming requirements that burden the market without benefiting investors.

The fourteen vexatious rule proposals that we withdrew last summer augured the methodical effort underway to conduct a first-principles review of our entire disclosure regime. Over time, many requirements that began as a framework to inform have become instruments to obscure. And in losing sight of our north star of materiality, we have drifted from what a reasonable investor would consider important, to what a regulator might find interesting.

So, it should come as little surprise that as our disclosure burden expanded, the number of our public companies diminished. Shortly after I left the SEC as a staff member in 1994, more than 7,800 companies were listed on the U.S. exchanges. When I returned as Chairman a year ago, that number had fallen by roughly 40 percent-a striking convergence with the nearly 40 percent of Americans who today have no exposure to U.S. equities. No stake in the companies that they help to build; little share in the wealth that they help to create.

More than a corporate milestone, I believe that every IPO is also an invitation for workers and savers to participate in the prosperity of the next generation of American enterprise. When fewer companies extend that invitation, fewer Americans receive it.

So, as I have indicated on several occasions, we are working to reverse the precipitous decline in public companies. A central objective for this goal is to rationalize disclosure requirements by delivering the minimum dose of regulation, again with materiality as our north star. Further, as a disclosure agency and not a merit regulator, the SEC should not use its rules to indirectly regulate matters-or put its thumb on the scale for issues-that should be left to the States, including corporate governance.

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.

Of course, as we return the SEC to a posture of getting out of the way when we should, we are stepping in decisively where we must. In my first year as Chairman, we have recentered our enforcement program to focus on fraud and bring actions that actually address investor harm and strengthen market integrity, instead of inflating numbers to chase media headlines. This course correction also rests on our renewed emphasis on holding individual wrongdoers accountable, which promotes stronger deterrence and better safeguards for investors.

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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.