Remarks at the 29th International Institute for Securities Market Growth and Development

Jay Clayton is Chairman of the U.S. Securities and Exchange Commission. This post is based on Chairman Clayton’s recent remarks at the 29th International Institute for Securities Market Growth and Development, available here. The views expressed in this post are those of Mr. Clayton and do not necessarily reflect those of the Securities and Exchange Commission or its staff.

Thank you, Erin [McCartney], for that warm introduction.

Welcome to the SEC’s 29th Annual International Institute for Securities Market Growth and Development. [1]

Thank you for being our guests over the next two weeks.

It is our honor to host 186 delegates from 69 countries this year. I know that many of you traveled long distances to be with us today, and I am appreciative of your dedication and your desire to engage in a dialogue with your international counterparts.

During your time at the Institute, you will hear from the SEC’s experts on a wide variety of subject matters, and you will also receive presentations from staff at the World Bank, the Commodity Futures Trading Commission, and the Financial Industry Regulatory Authority. I am confident that you will gain new insights and approaches that you can apply when you return home.

Before offering my perspective on several topics that are priorities for the SEC, including areas where international collaboration is important to our success, I would like to note that this Institute and the SEC’s Technical Assistance program started 29 years ago with a focus on Eastern European countries.

Over the years, we have learned many lessons, including that strengthening partnerships among our numerous international counterparts enhances our ability to oversee our capital markets.

With that in mind, the Institute is designed as a resource for the international authorities that the SEC works with to further our enforcement, supervisory, and policy objectives. Through our work, we have seen first-hand how fostering relationships with our international counterparts benefits the SEC, particularly in the area of enforcement. For that reason, the Institute has remained a hallmark of our Technical Assistance program for so many years.

Capital Formation

Most international securities authorities have a three-part mission that, broadly, covers: (1) protecting investors; (2) maintaining fair and orderly markets; and (3) supporting market growth. At the SEC, we refer to the third prong as “facilitating capital formation.” This aspect of our mission is very important to me.

Why is this issue important and what does it mean for a government regulator to facilitate capital formation?

Capital markets are engines for economic and societal growth and development. Our capital markets finance job creation, infrastructure development, human capital development and raise the standard of living for future generations, nationally and internationally. At the SEC, as Erin mentioned, I have focused in particular on helping small and medium sized businesses from across the US access capital to grow and, in turn, provide investors, including Main Street investors, with expanded investment opportunities.

For example, we have taken meaningful steps to modernize our disclosure rules and in doing so have reduced regulatory burdens. In particular, we have offered more companies the ability to use less expensive scalable disclosure standards that are more appropriately tailored for their size and activity. We have also taken steps to simplify and update financial disclosures, saving issuers significant time and expense while also enhancing the quality of disclosure. Each of these improvements required a thoughtful approach to regulation that includes input from the industry and experts, and importantly investors of all types.

In times of technological change, we also need to ensure our approach allows capital markets to innovate. As an example of putting this perspective into practice, in October of 2018, we launched our new Strategic Hub for Innovation and Financial Technology, which we call the “FinHub.” The FinHub plays an important role in facilitating the SEC’s engagement with innovators, developers, and entrepreneurs.


While capital formation is critical to our work, we are laser focused on addressing fraud and abuse in our markets, particularly when Main Street investors are the victims. According to recent estimates, more than 50% of US households participate in the capital markets, thereby providing broad based fuel for our economy. [2] For this to continue and expand, our Main Street investors must have confidence that the capital markets are fundamentally fair and honest and that, we, the regulator, will take meaningful action to address fraud and abuse. Investors are willing to take risks but they—rightfully—expect protection from bad actors.

Unlike some regulators in the audience, the SEC does not have criminal authority, but we have robust civil investigative powers. As you will hear, SEC staff routinely compels production of bank records, emails, and phone records, and takes testimony under oath. We use this evidence to address violations in our markets, expose and deter wrongful conduct, and protect our investors. We also have the capacity to seek court ordered emergency asset freezes to protect investors from an ongoing fraud.

As the methods used by bad actors have evolved, so have our practices. In 2017, the SEC created a Cyber Unit within the Division of Enforcement to focus on emerging threats to the market, including account intrusions, hacking to obtain material non-public information, and common disclosure and registration violation, hyped by the use of new labels for securities such as “coins” and “tokens,” along with other cyber-related misconduct.

Enforcement is an area where we rely heavily on the assistance of our international counterparts, which brings me to the final topic I would like to address—international cooperation.

International Cooperation

Securities fraud knows no borders. In fact, bad actors often use borders (and related jurisdictional limits) to their advantage. Last year, the SEC’s Enforcement Division sought international assistance through our Office of International Affairs more than 1,200 times. Many of our requests for foreign assistance are made through IOSCO’s MMOU.

I would like offer my appreciation to you for the assistance you and your colleagues have provided to us and, perhaps more importantly, to reflect on the tremendous success of the IOSCO MMOU. There are now 122 signatories to the MMOU, which has created a network of securities authorities that have the capacity to quickly and efficiently respond to requests for assistance from one another. It is now used over 4,000 times a year with a strong track record of success. [3] The MMOU has made the world’s capital markets safer for investors, and it is a testament to the benefits of multilateral cooperation.


As securities regulators, we face many challenges ahead. Some of them I have touched upon today while others—such as new data protection laws that may impede our regulatory cooperation are discussed daily in the news. While we think about our responses to all of these issues, it is important to keep in mind that many of the great accomplishments that we have made together over the years started by informal conversations.

This Institute offers an opportunity for each of you to network with each other and to enhance your shared commitment to protecting investors and making markets more robust.

Finally, I extend my thanks to the Office of International Affairs for organizing this event. I want to recognize in particular Raquel Fox, Scott Birdwell and Adam Anicich for their efforts, along with all the presenters who have taken time out of their schedules to spend time with you.

I look forward to deepening our partnerships and friendships. Thank you.


1My remarks reflect my own views and they do not necessarily reflect the views of the Commission or my fellow Commissioners.(go back)

2See Stock Ownership Among Americans, Gallup Poll, (April 2-11, 2018), at; Changes in U.S. Family Finances from 2013 to 2016: Evidence from the Survey of Consumer Finances. Federal Reserve Bulletin, Vol. 103, No. 3. (September 2017), at back)

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