At the Wall Street Journal’s CFO Network annual meeting held in Washington DC on June 11, 2018, Securities and Exchange Commission Chair Jay Clayton provided some insights on areas of focus for the Commission. Chair Clayton noted that the Commission remains focused on measures designed to promote capital formation without sacrificing investor protection. Chair Clayton noted that the Commission continues to work on disclosure effectiveness reforms. He also noted that the Commission is working on amendments to the definition of “smaller reporting company,” and anticipates that the amendments will be released before October. The moderator asked Chair Clayton to comment on the increasing significance of private capital. Chair Clayton noted that the Commission is focused on the decline in the number of U.S. public companies and on the state of the U.S. initial public offering market. He noted that retail investors are being shut out of investment opportunities given that most private placements are available only to accredited investors. He noted that the Commission is looking at the private placement framework, and noted that, at present, the private placement is quite binary—if you are an accredited investor, you are able to participate in a private placement and potentially face significant losses, and if you are not an accredited investor, you are largely foreclosed from participating in the private placement market. Chair Clayton also discussed proposed Regulation Best Interest as well as a number of other priorities.
