Jay Clayton is Chairman of the U.S. Securities and Exchange Commission. This post is based on Chairman Clayton’s recent remarks at the SEC’s Small Business Capital Formation Advisory Committee Meeting, 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 Carla [Garrett], members of the Small Business Capital Formation Advisory Committee, Martha [Miller], and the staff in the Office of the Advocate for Small Business Capital Formation for holding the second meeting of the Committee outside of Washington, DC. [1] It demonstrates a clear commitment to capital formation across the country. I thank you for your thoughtful and pragmatic exploration of how our rules, regulations, and policies impact small businesses and their investors, including smaller public companies. In that vein, a very big thank you to our host, Creighton University, for the warm welcome to Omaha, NE.
Your agenda today is packed with substantive topics that I believe can have a very positive impact on smaller companies and their investors. This morning you already heard from the staff in the Division of Corporation Finance about the SEC’s Concept Release on Harmonization of Securities Offering Exemptions. [2] The concept release is the first step in what I hope will be a much needed reform of our exemptive offering framework, which I have referred to before as an elaborate patchwork. [3] I understand that this morning was also the first step for the work of the Committee in this area and that you will continue to consider how we can harmonize and make more effective our exemptions from registration at a future meeting of the Committee. The opportunity for improvement is stark. Private capital raising is now outpacing capital raising in our public markets, yet our Main Street investors have no effective access to investments in private capital offerings. Further, the availability of private capital is geographically skewed and, as we discussed at your first meeting, significantly favors companies with valuations in excess of $50 million. I look forward to your work in this area. In the meantime, I encourage everyone, including small businesses and their investors, to send us their comments and share their suggestions for how we can improve the exemptive offering framework.
