In his most recent testimony in Congress, the Securities and Exchange Commission Chair once again focused on retail investors.  Chair Clayton cited a number of statistics regarding the level of retail participation in the capital markets.  He noted that at least 51 percent of U.S. households are invested directly or indirectly in the U.S. capital markets.  Chair Clayton noted that the recently released strategic plan has as a cornerstone a focus on retail investors.  Addressing a frequent theme, Chair Clayton commented on the decline in the number of U.S. public companies.  He also noted the impediments to investment in private companies by “Main Street investors,” which impediments limit Main Street investor participation in the growth of many successful private companies.

Addressing the Commission’s plans, Chair Clayton noted that the Commission will consider final amendments to the smaller reporting company definition and the thresholds that trigger Sarbanes-Oxley Section 404(b) auditor attestation requirements.  He mentioned that the Commission also will focus on the possible expansion of testing the waters to companies other than emerging growth companies, the disclosure effectiveness initiative, modernization of various Industry Guides, and amendments to the financial information requirements for guarantors and acquired businesses.  Chair Clayton also discussed the rulemaking required of the Commission to amend Rule 701 and Regulation A.  He commented on the success of Regulation A and generally solicited offerings made under Rule 506(c) and noted that the Division of Corporation Finance is considering ways to harmonize and streamline the exempt offering rules in order to enhance their clarity and ease of use.

Chair Clayton also addressed the rulemaking mandates contained in the Small Business Credit Availability Act relating to the securities registration and communication requirements for BDCs and in the Economic Growth, Regulatory Relief, and Consumer Protection Act relating to the securities registration and communication requirements for closed-end funds.  Finally, he noted the Commission’s remaining Dodd-Frank Act rulemaking mandates relating to executive compensation rules and the specialized disclosure rules.  The full text of the prepared testimony may be found here.