March 4, 2015
Good morning. Thank you all for being here. I will be very brief so that you can get to the business at hand.
I, too, would like to welcome Michael Pieciak who will be serving as the committee´s observer representative from NASAA. Mike is the Deputy Commissioner of the Vermont Securities Division, and I am very pleased he is here on behalf of the state securities regulators to bring that knowledgeable and important voice to your discussions.
Today´s agenda addresses several important topics, including Regulation A+, secondary market liquidity, and recommendations regarding the definition of accredited investor, all of which are quite timely topics for the Commission´s ongoing work in these areas. As you know, our Regulation A+ and crowdfunding rulemakings are designed to facilitate smaller companies´ ability to access capital and to provide investors with additional investment opportunities. In making investment decisions, investors may naturally consider whether they will have the ability to resell their shares in the future; there is no doubt that secondary market liquidity is an important factor impacting the availability of capital for small businesses as well as investor protection.
SEC staff in the Divisions of Corporation Finance and Trading and Markets have been looking at various means to facilitate the secondary market trading of securities issued by small businesses. Among a number of other possible avenues, the staff is considering whether the development of appropriately structured venture exchanges could provide more liquidity for the securities of smaller companies. Some earlier exchanges have not been successful; the reasons for that need to be carefully studied along with other issues. Smaller companies are important to our economy, and it is important to support appropriately a market structure that promotes the capital formation of smaller companies, while also providing robust investor protections.
More generally, as I have emphasized on several occasions, one market structure may not fit all and that the Commission must concretely focus on how to enhance the market structure for smaller companies. I look forward to perspectives and ideas from your committee on what obstacles and possible solutions you see to the development of secondary market liquidity venues for privately-issued securities.
As promised, I will stop to let you get down to business. As always, we very much appreciate your expertise and efforts. Facilitating small business capital formation is a priority we all share. It is our job, with your help, to convert the supportive words into workable and effective actions.
Thank you.