SEC Investor Advisory Committee to Discuss Modifying Private Securities Exemptions, More

 

The Securities and Exchange Commission (SEC), Investor Advisory Committee (IAC), has scheduled a meeting to take place on Thursday, March 2nd, 2023.

The IAC was created under the D0dd-Frank Act and is designed to advise the Commission on initiatives aimed at representing individual investors, such as disclosure, promoting investor’s interests, and investor protection topics. In recent years, the IAC has shifted more to represent the desires of the Commission as opposed to what individual investors want.

For the upcoming meeting, the agenda has been released, and one topic will be of interest to all private market participants – including investors. The IAC has put together a panel on the growth of private markets and the impact on public markets. As many observers understand, private markets have grown dramatically as public markets have endured decades of increasing cost, largely due to growing compliance requirements that take time and money. Markets tend to be efficient, so public markets have declined, and private markets have risen.  While the JOBS Act of 2012 helped to mitigate some of the problems, more needs to be done in providing access to capital, along with investor opportunity, but the current leadership of the SEC is guiding this issue in the wrong direction.

The panel is entitled: Examining the Growth of Private Markets relative to the Public Markets: Drivers and Implications.

“Panelists will explore the growth of the private markets and the factors contributing to that growth (performance, market dynamics, etc.). The panel will also look at the implications of this growth on decisions made by operating companies and investors, and if there are reasons to consider modifications to the existing disclosure and regulatory framework.”

One of the top items on the SEC’s agenda is changing Reg D, the most popular securities exemption that fuels a market that is over $2 trillion. Reg D is vital for capital formation for promising young firms that create new jobs and generate economic activity. The review includes changes to the definition of an accredited investor.

Other topics on the agenda include Oversight of Investment Advisers and Open-End Fund Liquidity Risk Management/Swing Pricing Rule Proposal.

The full agenda is available below. The event will be live-streamed on the SEC”s website and available to the public.


Investor Advisory Committee
March 2, 2023

10:00 a.m. – 10:05 a.m.
Welcome and Introductory Remarks
10:05 a.m. – 10:25 a.m.
Opening Remarks
10:25 a.m. – 10:28 a.m.
Introduction of New Investor Advocate
10:28 a.m. – 10:30 a.m.
Approval of Previous Meeting Minutes
10:30 a.m. – 12:00 p.m.
Panel Discussion Examining the Growth of Private Markets relative to the Public Markets: Drivers and Implications
Panelists will explore the growth of the private markets and the factors contributing to that growth (performance, market dynamics, etc.). The panel will also look at the implications of this growth on decisions made by operating companies and investors, and if there are reasons to consider modifications to the existing disclosure and regulatory framework.
Moderated by:
Alice Stinebaugh, Social Studies Department Chair, Parkland School District; Adjunct Instructor—Economics, University of Scranton
Leslie Van Buskirk, Administrator, Division of Securities, Wisconsin Department of Financial Institutions
Panelists:
  • Steven Neil Kaplan, Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance and Kessenich E.P. Faculty Director at the Polsky Center for Entrepreneurship and Innovation
  • Elisabeth de Fontenay, Professor of Law, Duke University
  • Tyler Gellasch, President and CEO of the Healthy Markets Association; Author of In the Public Interest: Why Policymakers and Regulators Must Restore the Public Capital Markets
  • Faith Anderson, Chief of Registration & Regulatory Affairs, Washington Department of Financial Institutions, Securities Division; and Chair of the NASAA Corporation Finance Section’s Small Business/Limited Offerings project group
12:00 p.m. – 1:30 p.m.
Lunch/Non-Public Administrative Session
1:30 p.m. – 3:00 p.m.
Panel Discussion Regarding the Oversight of Investment Advisers: Can Regulators Keep Up with Growth in the Industry
There has been significant growth in the number of registered investment advisers over the last ten years, creating significant new demands and challenges for the SEC and State Regulators to provide effective oversight of the industry. This panel will explore how regulators are managing oversight of the industry, given this growth, through their examination programs. Potential approaches to enhancing oversight of the industry and bolstering the examination programs will also be discussed.
Moderated by:
Paul Roye,Retired Senior Vice President, Capital Research and Management Company
Panelists:
  • Natasha Greiner, Deputy Director, Division of Examinations; and National Associate Director, Investment Adviser/Investment Company (IA/IC) Examination Program, U.S. Securities and Exchange Commission
  • Karen Barr, President and CEO, Investment Adviser Association
  • Stephen Brey, Michigan Licensing and Regulatory Affairs
  • Micah Hauptman, Director of Investor Protection, Consumer Federation of America
3:00 p.m. – 4:00 p.m.
Panel Discussion Regarding the Open-End Fund Liquidity Risk Management/Swing Pricing Rule Proposal
This panel will focus on potential impacts of the recent rule proposal by the SEC. The discussion will focus on identifying potential impacts from implementation of a “Hard Close” on mutual fund orders. Secondly, panelists will discuss the use of swing pricing in Europe and its potential use here in the U.S. markets.
Moderated by:
Cien Asoera: IAC Investor-as-Purchaser Subcommittee Chair; Financial Advisor, Edward Jones
Panelists:
  • Shelly Antoniewicz, Senior Director, Industry and Financial Analysis, Investment Company Institute
  • Yiming Ma, PhD, Assistant Professor of Finance, Columbia Business School
  • Peter Mahoney, Principal and Head of Global Fund Accounting, Vanguard
  • Tim Rouse, Executive Director, SPARK Institute
4:00 p.m. – 4:30 p.m.
Discussion of Recommendations
4:30 p.m. – 4:45 p.m.
Subcommittee Reports
4:45 p.m. – 4:50 p.m.
Access and Inclusion Working Group Report
4:50 p.m.
Closing Remarks and Adjourn


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