You should have a box on your screen that shows how much time is remaining. Some trouble and ive had senators tell me they just cant find that box or they dont see it. Last hearing one of the senators asked me to give them a reminder. I will do that this time for everybody. So at 30 seconds left on your clock, there will be a tone, a bell ring to remind senators and witnesses that their time is a most expired, then at the end of five minutes, another bell will ring. That way we can all know how the clock is working even though we dont find it on our screens. Today we will receive testimony from the securities and Exchange Commission chairman jay clayton regarding the work and the. Genda of the sec thank you for your appearance before the committee today which is essential to our oversight of the sec. And welcome. You last appeared before this committee in december of last year. The covid19 pandemic hit the United States shortly after that hearing and thesec has taken many important steps to help limit the economic shock to our markets as governments have attempted to confront this unprecedented event. Such asused tools market wide Circuit Breakers for the First Time Since their adoption, when markets stopped 7 from the previous days Closing Price on the s p 500 index. There were a number of limits of breaks,circuit which resulted in the halting of all further downward trades. Despite the high levels of it is myy, understanding that the current mechanisms in place serve their intended purposes of increasing market stability. Additionally, in order to comply with cdc guidance, you offer saw an unprecedented temporary closure of physical trading floors. This Business Continuity measure supported trading while ensuring the health and safety of Market Participants. The sec has continuously pursued actions, including a number of actions against those seeking to take and manage of investors during this potable time seeking to take advantage of investors during this vulnerable time. All this while working remotely. It is commendable that he have continued to advance the items on your regulatory agenda which are the result of many months and sometimes years of diligent staff work. The sec finalize amendment to improve the definitions of accredited investor, and qualified institutional buyer, which will now take into consideration education and expertise, ultimately increasing investor participation in offerings, and expanding access to Capital Markets. The sec recently modernized the offering framework, which will be a lifeline to small and mediumsize Companies Navigating the previously complex system. These clear and concise rules will allow Smaller Companies to focus on getting their businesses back on track, while improving the consistency of Investor Protections. Engaged Market Participants in crafting modernized shareholder proposal thresholds and proxy voting rules. These modernizations in longer permit is more number of individuals with limited sticks to consume corporate boardrooms and will allow companies to better focus their efforts on covid19 recovery. The sec improved the stream manning of information collected for disclosure. It had been more than 30 years since in these disclosures had been reviewed. Last year the sec federalized the package of rulemaking including regulation best interests, and two interpretations under the advisers act. Compliance with these rules began on june 30. Since june, the sbc has been reviewing firms compliance efforts and identifying additional areas for compliance improvements. Another modernization effort underway at the sbc is the creation of a strategic hub for innovation and financial technology. This Important Initiative is critical in the interagency coordination and dissemination of information to the public regarding initial koin offerings and other cryptocurrency matters. Clearly initial coin offerings and other cryptocurrency matters. I commend you on advancing rulemaking initiatives, inspections, enforcement actions, and issuer and found filings. I look forward to continuing to to ensure thatec u. S. Markets come back from the covid19 disruptions much more strongly, more liquid and more before. Than ever in closing, i want to thank chairman clayton for his service and wish him the best of luck in his future endeavors as he departs the commission in the coming weeks. The will and drive you brought to this job allowed you to bring about many significant improvements that were long overdue. I wish you the best of luck in your future endeavors, and again, thank you for your service. Senator brown. Sen. Brown thank you, mr. Chairman. Commissioner clayton, i believe this is your last iaring chairman crapo, believe this is a last hearing. You. And chair clayton, thank you for your service to our country. On this election, voters rejected this administration and its wall streetfirst attitude. Across the country it is clear that people want financial watchdogs who look out for them, not make life easier for american ceos. It is time to turn the page on this failed administration by at least 5 million votes, and to Work Together to build an economy that actually works for everyone. An economy were all workers can save and invest their hard earned money for payment, send their kids to a committee dignity,to retire with and it is time that everyone had the chance to join in. That means finally working in a real way to eliminate the racial wealth gap. It means we have to enlist everyone in our government in this project, including the sec. Public servants have done important work in the middle of a Public Health crisis. We thank you and all of them for that, monitoring for fraud and misconduct related to the pandemic, continuing their work to protect investors, maintaining orderly market, and promoting capital formation. These efforts helped working families saving and investing today and Building Confidence in our markets in the future, but i believe we should aim higher than simply making markets more stable. We can do better than just preventing crashes and outright fraud, we need to make markets actually work for working people. Over the years i have raised concerns about how your leadership has left behind people whose savings are at stake in our markets, denying them the ability to hold executives accountable, and withholding critical information about how companies are run and how they affect the environment in their communities. Instead of reducing transparency can let undermine protections we have even in the face of protests from advocates of experts. From employees across the country scrapping and saving to put money into retirement all in athey are worse place since you have been in office. That does not even include those who want to save for their family and their retirement but just cant cause their paycheck isnt enough. The wealthy get wealthier in the middle class shrinks. Interests inst your term, it doesnt put momandpop customers first. A few weeks ago you dismissed the initial review after the standard went into effect in june. Even though you said firms were ,aking good faith efforts your staff reported shortcomings in compliance, and failures to disclose disciplinary history to clients. In fact it doesnt seem like you have t a way to tell if this rule helped at all. Advisinginal rules on are a clear examples of the administration taking the side. Every single time in this committee we talk about this. Every single time we know this. People get in line to do this, the administration taking the side of corporate interests over american savings and investing in the future. Over the years shareholder engagement has forced important conversations to happen in boardrooms. We need to Push Companies to focus on improving diversity, governance, better yet your agenda has attempted to stifle these important conversations. I am not on the one who is agenda. About your last week the north American Securities administrators association, 30 of its members state watchdogs included from ohio, concerned about a recent board role with few safeguards which would, in their words, facilitate in the market. That is their way to say they are concerned about rampant fraud. Not only our they word that you are their constituents. Didnt take the opportunity to mature Public Companies disclosed the risks that Climate Change posed to their businesses. You did the opposite, watering down corporate financial disclosures. When you try to improve corporate disclosure, it still short. Failing to identify the numbers of fulltime workers compared to parttime workers. We are never going to be able to undo the corporate Business Model that treats the workers as expendable if we cant even get companies to put out Accurate Information on the workers will make their businesses successful. While the pandemic process challenges to the commissions enforcement work, it also revealed how applying Additional Resources to the Whistleblower Program delivers results. Congratulations on that. By reallocating staff to review whistleblower tips, you managed record results. I hope my concerns about the uncertainty created by your recent change to the rules dont undermine the obvious successes of that program. Enforcement over the sec has aggressively pursued covidrelated scams and fraud. The last year of enforcement same bute of the looking under the hood you see too many cases without individual accountability. Last weeks announcement that the sec charged the wells fargo former ceo for deceiving investors a par as part of the account scandal was discovered in 2016, it was rare and long overdue, where your agency has actually helped someone accountable for breaking the law and ripping people off at a big better cooperation. Youryou were nominee, words individual accountability drives behavior more than corporate accountability. You dont get better behavior by taking years we have been talking about the wells fargo scandal for over half a decade by taking years to hold top executives individually accountable for intentional and, god knows it was intentional deception. American voters sent a clear election, they are tired of an economy where big corporations and wealthy ceos played by a different set of rules than people who work , rollback important safeguards. You claimed to be modernizing or updating the rules. People are tired of that political spin. When you say reform, it seems you mean make things easier for the biggest guys. When you say modernize, you seem to them making it much harder to hold powerful ceos accountable. When you say update, you seem to be meaning further entrench the wall street Business Model that exploits workers. 80 million americans rejected your agenda in this election and i hope we can reverse it. Even you all need to relearn the fundamental elements of security laws when you return to what i assume will be a lucrative private practice. , promoting workers hard and servings should begin with a simple concept. Disappointed chair clayton, that you did not see it that way. A decisive majority of the country surely does. Thank you. Chairman crapo thank you, senator brown. We turn to you, commissioner clayton. Commissioner clayton thank you for the opportunity to writ testify today. Over the past year, including our work to address the effects of the covid19 pandemic. To begin i want to thank you for the support and assistance you provided the sec during my tenure. I have enjoyed the thoughtful it candidate engagement and you have provided adequate and Additional Resources to help us expand and modernize our investororiented efforts. I wish circumstances would have allowed us to get together in person and i hope to reach out to all of you bilaterally in the time i have left. Working alongside the dedicated women and men of the commission has been the privilege of a lifetime. I am honored to call them colleagues and friends and i could be proud of the work they have done each and every day on behalf of investors, especially this year in the face of incredible professional and personal challenges. Their dedication combined with a strong, time tested and flexible Regulatory Framework allowed the sec to respond quickly to the and otheronomic, unexpected challenges we faced this year. I am pleased to report that while the pandemic significantly impacted how we did our work, and did not impact the work itself. With respect to covid19 the sec responded quickly by, one, providing targeted regulatory relief to ensure the continued operation of our markets. , dedicating significant resources to covidrelated enforcement and examination efforts. Three, increasing investorfocused oversight and engagement in key areas of stress. And four, working closely with our domestic and foreign regulatory counterparts to monitor and mitigate the impacts of covid19. Here i must thank the treasury, the Federal Reserve, and congress for their swift action to intervene in our markets and provide liquidity and support for our economy more generally through the c. A. R. E. S. Act. Chairmanship recognizing the value of our time tested Regulatory Framework the agency is focused on modernizing the rules and regulations that implement that framework, some of which had not been meaningfully updated in many, many decades. As just a few examples, this year the commission move forward on a number of initiatives to one, improve the proxy voting and shareholder proposal process. Two, facilitate access to capital in our public and private markets and in particular with respect to our small and mediumsized businesses. Three, modernize the Fund Disclosure and Regulatory Framework with an investor Oriented Approach and four improve and modernize our equity market structure. Despite our mandatory telework environment, we have also continued our strong enforcement and examination programs, focusing on areas that are most impactful to main investors, including for our teachers and military services and dedicating resources to address covert related frauds and other matters. By leveraging technology we have continued our robust outreach and engagement and engagement initiatives to investors and an array of Market Participants. Finally, as the importance of diversity and inclusion and opportunity to the commission, the financial industry in our society more generally was brought into start released relief by the events of 2020, building on a strong foundation, provided by among other things our office of minority and women inclusion and our Diversity Inclusion strategic plan, we have continued to advance initiatives to further our collective commitment to these principles and to each other at the commission. Again for the opportunity to testify about the work of the commission, the fantastic work of the women and men of the commission and i look forward to your questions. Chairman clayton. Thank you for the service that you have given us the chairman of the sec. Opening statement, i am impressed by the rules youve been able to modernize and improve during your tenure. Your regulatory agenda continues to be ambitious. There is much work left to be done. What areas do you think the sec should continue to focus or areas you think hunger should take a closer look at this . Commissioner clayton sir, let me tick off a few. First is corporate hygiene. The pandemic, and the stress we have seen errors where corporate hygiene could be better. To remove any uncertainty that corporations are operating with transparency and reverse governance. Plans,f those can be 5a option pricing and what i call the 8k information gap. I think these are things, my views in this area is that most good corporations follow. This information out there. Had discussions with members of congress. That is something we can learn from. We also can learn a lot from our mandatory telework and farming ironment, and not only the inefficiency by the importance of Electronic Communications. We need to move our reglet torry framework forward to an electronic framework. Our Regulatory Framework to an electronic framework. We wouldve had a problem communicating with our Retail Investors. Not to take too much of your time but i think the proxy process needs improvement. Our 13f proposal revealed that companies do not have efficient access to their Shareholder Base. We need more access to our Shareholder Base for companies. It benefits those companies and shareholders. Finally in the area of esg, we need to be rigorous in our approach to this disclosure area. Omb. Come the report from i discussed this in detail look forward to doing so in the future. Thank you. Summary of what you think that sec these to be focused on and with as well as what Congress Needs to be paying attention to. Decisiveas quick and and taking action in response to the covid pandemic and the tools that were used such as the market white Circuit Breakers, of the as oversight physical floors of the nation stock exchanges being closed in order to comply with cdc guidance. Swift actions to protect investors from fraud. And providing temporary relief in a number of other areas. As you reflect on the actions of to the in the response pandemic, how do they shape the way sec should move forward, are tions youporary ac believe that the commission should consider making permanent . Commissioner clayton the short answer is yes. The shift to a mandatory telework environment again showed the importance of being able to conduct business elec