Keynote Address at AFME’s Annual Financial Services Policy Dinner

Thank you very much, Adam [Farkas], for your kind introduction, and for the invitation to join you all this evening. I regret that a government shutdown here in the United States prevented me from joining you in person today. But I am grateful for the opportunity to take part in this conversation virtually, and to discuss ways in which we can work together on matters of mutual concern.

Let me begin by thanking Adam and our hosts at AFME for their flexibility under these circumstances. And let me also add that the views I express here are my own as Chairman of the SEC and not necessarily those of the SEC as an institution or of the other Commissioners.

I understand that, by design, tonight's dinner will spark a constructive dialogue on transatlantic cooperation. That sentiment captures the spirit in which I appear before you this evening-here to speak, of course, but no less, to listen.

After all, headlines can emphasize our differences. But, if my time in public service has taught me anything, it is that wisdom more reliably dwells in the lessons of our past than in the passions of the present. History, I think, has a way of steadying us.

François Mitterrand, the fourth president of France's Fifth Republic, likely agreed on very little with President Ronald Reagan. I might add that I, as an American living in Paris at the time, was not an admirer of many of his policies. But, during one of President Mitterand's visits with President Reagan in the White House, Monsieur Mitterand remarked, "Our eyes are not always turned in exactly the same direction.... And that, in a way, is perfectly natural, in view of the fact that we aren't sitting in the same place."[1] "But when it is necessary," President Mitterrand concluded, "you are present-and we are present" for one another.

And so it was, perhaps most poignantly, after the Second World War. Cities that stood for centuries were reduced to rubble. And out of those embers emerged a continent that was scarred by the wounds of war, its people weary and its future uncertain. As Americans, we felt the tug of our ties to Europe, forged in the shared struggle to defeat an evil totalitarian system and sharpened by the specter of yet another under Soviet influence. Through the Marshall Plan, the United States committed itself to Europe's recovery, investing our faith in the continent as much as our capital.

Of course, I am also reminded of Europe's presence during our own, more recent, hour of need. Soon after the plumes of smoke cleared from two destroyed skyscrapers in Lower Manhattan, U.S. and EU authorities partnered with their global counterparts to develop the Multilateral Memorandum of Understanding for cross-border enforcement cooperation, otherwise known as the IOSCO MMOU.[2] The speed with which signatories negotiated and adopted this MMOU was unprecedented, as my predecessor SEC Chairman Harvey Pitt said at the time, and shows the spirit of global cooperation in securities regulation that is true then, as it is true today.[3] The MMOU has grown to 131 regulators, and IOSCO members continue to expand and enhance their cooperation.[4]

To be sure, ours is partnership that, while often revealed in moments of crisis, is hardly confined to them. It also finds expression in the work that follows. Indeed, the same ethos of mutual support that has sustained us through hardship has also summoned us to opportunity. European capital, for example, has long helped to author our economic story, because before the United States was a nation, it was an investment. The first permanent European settlements in the Western Hemisphere were financed through joint-stock enterprises that allowed investors on your side of the pond to pool together capital in anticipation of a burgeoning new world. Over time, Europeans have only deepened their engagement with American markets and today hold record levels of U.S. equities, with ownership soaring by 91 percent over the last three years alone.[5] We are grateful for this engagement and encourage our European friends to continue investing alongside us.

Of course, it can be easy to romanticize the transatlantic relationship of the postwar era. To echo President Mitterrand, our gaze is not always fixed in the same direction. Yet despite any differences that may arise, our economies-and our people-are entwined in ways that healthy disagreements can sometimes obscure but scarcely unravel.

Which brings me to today, and to the work that lies ahead. President Trump said it very well in Davos: "The United States cares greatly about the people of Europe...and we believe deeply in the bonds we share as a civilization."[6] Indeed, the United States and Europe are bound in many ways, notably by a belief in global markets as a force for economic growth. The EU demonstrated this most recently by launching the Savings and Investments Union Initiative. And AFME's stated aim-to advocate for deep, competitive, and integrated global capital markets-speaks to that same understanding.

This is ultimately for the good of all. As they say, a rising tide lifts all boats-on both sides of the Atlantic, I might add.

But every so often, a ship needs to shed the barnacles clinging to its hull.

For our part, America's $124 trillion capital markets remain the deepest and most liquid around the globe. They are a marvel of human ingenuity in channeling resources toward their most productive uses. But over many years, Washington has allowed onerous regulations to build without pruning and weeding those regulations that are no longer necessary, dissuading companies from going public-and discouraging prudent risk taking once they are. Indeed, the path to public ownership has become narrower, costlier, and saddled with rules that can create more friction than benefit. So, under my leadership, the SEC is taking a number of steps to make our capital markets more efficient and more attractive for investors and businesses alike.

First, we are working to simplify and scale disclosure requirements to reduce the costs of preparing SEC filings and, at the same time, make them more comprehensible so that investment decisions can turn on economic signals rather than regulatory noise. Our approach is consistent with America's G20 priority of unleashing economic prosperity by limiting regulatory burdens.

Second, we are de-politicizing shareholder meetings and returning their focus to voting on director elections and significant corporate matters. Political and social issues belong neither in the boardroom nor before shareholders. We should task our elected officials-not our regulatory agencies-with addressing these matters.

Finally, we are focused on reforming the litigation landscape in the United States to eliminate frivolous complaints, while maintaining an avenue for shareholders to continue to bring forth meritorious claims. In short, we must shield the innovator from the frivolous, while protecting the investor from the fraudulent.

Taken together, these steps will help to ensure that America's capital markets remain open, dynamic, and, above all, worthy of the trust that investors place in them, both here at home and around the world.

Meanwhile, for foreign companies, including those in Europe, that list their shares on U.S. stock exchanges and access our capital markets, we continue to evaluate whether to update our current regulatory regime to reflect today's corporate practices and business models. Last June, the SEC solicited public feedback on how it could modernize rules in this area, which the agency developed in 1983. SEC staff is currently reviewing ideas from over 80 comment letters submitted by trade associations, law firms, public companies, individual investors, and others. In whatever way the Commission may ultimately amend its rules in this area, my focus is not to limit the number of foreign companies that access the U.S. capital markets. Rather, my north star is that retrospective review of our rules, in light of changed circumstances, is a hallmark of an effective regulatory regime.

Now, as we work to widen the pathway to public ownership, we must not lose sight of the bedrock beneath it: high-quality accounting and audit standards.

I have previously discussed the importance of the International Financial Reporting Standards Foundation and its accounting standards board, the International Accounting Standards Board (IASB), promoting high-quality accounting standards that are focused solely on driving reliable financial reporting. The International Standards on Auditing issued by the International Auditing and Assurance Standards Board (IAASB) are also essential as these standards are used in every global capital market, often as a baseline for local standards. High-quality international accounting and auditing standards help to ensure transparency, comparability, and reliability of financial information. They also enable efficient investment decisions and foster economic stability. Importantly, strong standards do more than safeguard the markets that already exist-they give innovators the confidence to build what comes next.

Both the IASB and the IAASB face funding pressures, as well as structural challenges that threaten their independence, stability, and capacity to sustain high-quality globally consistent standards. I am committed to working with my fellow financial sector authorities to carry out the reforms needed to ensure a viable international standard setting process moving forward.

Finally, leadership requires the courage to implement core principles anew when emerging technologies offer the promise of stronger markets. For too long, Washington approached emerging on-chain financial infrastructure as something to be restrained by regulatory ambiguity and overzealous enforcement, rather than to be evaluated on its merits as a potential tool for modernization. That posture chilled innovation and left meaningful potential unrealized. Thankfully, it is a new day at the SEC. We intend to help deliver President Trump's call to make America the crypto capital of the world.

Through Project Crypto, which will now proceed as a joint initiative with our sister agency, the Commodity Futures Trading Commission, whose new chairman was one of my former counsel, we are exercising the authorities that Congress has already provided to explore the possibilities unleashed by tokenization, including an innovation exemption framework for permissioned on-chain finance. We will preserve investor protection, transparency, and supervisory oversight while giving regulated markets a glimpse of how modernization can reshape how assets are issued, traded, margined, and settled. These efforts are not about weakening standards or recreating legacy risks in new forms, but they are about strengthening market infrastructure through technologies that enhance resilience, auditability, and efficiency.

We should refrain from forcing on-chain innovations to comply with legacy market rules that are not fit-for-purpose, especially where that strategy would hamstring technological evolution to preserve the status quo. While innovators should know that we will not create shortcuts that degrade the policy goals of our statutes, we will not permit fear to guide us, either. This balancing act is how the United States can keep our markets the world's deepest and most liquid-not by standing still in the face of change, but by pairing regulatory discipline with the courage to drive it.

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As we pursue this work, allow me to conclude by turning from the SEC's policy priorities at home to the partnerships that we maintain across borders, many of which are represented at tonight's dinner.

The SEC's cooperation with European securities regulators remains strong, especially in the areas of enforcement and supervision of registrants. We also continue to collaborate-closely on many fronts-to address a number of cross-border regulatory issues.

Last year, for example, 42 percent of our incoming requests for enforcement assistance came from Europe, while 32 percent of the Commission's outgoing requests were to Europe. In terms of supervisory cooperation, 55 percent of our foreign requests were from Europe, while 56 percent of our outgoing requests went to Europe. Our working together, hand-in-hand, with foreign authorities to prevent cross-border securities law violations, is essential to carrying out the SEC's investor protection mission.

Meanwhile, through steady and sustained dialogue, we come to understand one another's regulatory frameworks, anticipate potential points of friction, and prevent differences from becoming divisions that might otherwise affect cross-border market activity. All of us want to know that we can pick up the phone quickly, speak plainly, and work together to address challenges as they arise. To be present for one another, as President Mitterrand might have put it.

That is why the SEC will remain steadfast in our engagement with our foreign counterparts around the globe-bilaterally and multilaterally, formally and informally-and keep lines of communication open, active, and ready when circumstances demand it.

After all, the Atlantic has never truly separated our economies over the past 250 years. In many ways, one can see it as representing less a barrier than a bridge connecting the capital, ideas, and relationships that bind markets and nations together.

So, as I stated earlier, this is the spirit in which I appear before you tonight-and it is the spirit in which the United States stands ready to work with Europe in the years ahead.

For now, I want to thank you for being a very patient and indulgent audience. I am grateful for your time this evening, and for accommodating my virtual participation. I very much look forward to your questions-and of course, to the work ahead. Thank you.