I want to focus on an issue ive been working on, which is the issue of Insider Trading. It erodes faith in our Capital Markets. It rewards insiders at the expense of often Retail Investors and is a real problem. What our witnesses know well, but the American People may not, is that there is no statutory prohibition on Insider Trading. The s. E. C. Can and does prosecute insider training through their antifraud and antimanipulation authority, but the case law that shapes this Insider Trading law is far from a solid foundation. Decisions can radically alter the landscape of what is unlawful almost overnight. Im a believer that if were going to prosecute someone for a crime we should put the crime into a statute. Im grateful both for the support and cooperation of the commission as well as the support of chairwoman waters and chairwoman maloney as well as the cooperation of the Ranking Member. We continue to work with my colleagues to refine the bill i want to give thoughts on some ideas that remain in discussion as we contemplate the bill. Those ideas are exclusivity and p ill ask you to opine whether requiring that Insider Trading cases only be charged through the provision of law as envisioned in this bill instead of also being able to rely on antifraud and antimanipulation authority. Would that help or hamper your ability to prosecute Insider Trading ka trading cases . So, look, i commend you for grappling with the issues that are most sensitive in Insider Trading. When is the information that gives somebody an advantage acceptable for them to have that advantage . Like, go count box cars and find out whether a company is lying. If theyre lying, you know, short the stock and we want to encourage people to seek information. Or information thats obtained in a bad way, which is, you know, the ceo of a company and you have information ahead of people and you trade ahead of it. We dont want that. Youre grappling with that issue and youre grappling with the issue of once i have impermissible information, when i pass it on, how liable are the people i passed it on to. I think youre doing a terrific job with grappling with those issues the court show grappled with. A lot of whats been built up over time i wouldnt want to lose in terms of what we think is a good way to obtain information and what we think is a bad way to obtain information. So that frames my answer to exclusivity. I dont want to lose that body of law that weve built up overtime. The newman decision gave people consternation. That decision has been narrowed. My answer to your question is, lets not give up what weve learned over the course of the last 30 years enforcing this law. And trying to improve it. Thank you, chairman, i appreciate that. The other issue is the age old issue we struggle with all the time which is preemption of state law. Commissioner jackson, let me turn to you on this one. Were discussing that issue, which we always discuss. My question i guess is if the bill, in fact, preempted the authority of states to investigate and prosecute Insider Trading, is it your sense that that would be a good thing or would it compromise our overall ability to deal with Insider Trading as a threat to the markets. I agree with the chairman that what we really want to do is build on a longstanding law rather than undermine things weve got. The reason thats true is what were trying to achieve is clarity. Both for people on the inside companies and for ordinary investors. We want to let people know what the law is. If we make significant changes, for example, by getting rid of tools that already exist and have existed for many years i think well create more not less uncertainty. Okay. Ive only got 20 seconds left here. I want to thank you for those answers. I think those are important contributions to getting us to a point where we can move forward with the bipartisan bill, which hopefully its always been our intension to make good law. I appreciate the cooperation and the commission will continue to work with you and clear up the legal ambiguity in this area. Thank you, the gentleman from ohio, mr. Davidson is recognized for five minutes. Thank you, madam chairwoman. Thank the board. Chairman, as a successful entrepreneur i want to thank you for your role so far. Notably raising caps to 250 million was a big win. I do, however, want to highlight some risks. Recently, director bill hinman stated in a fireside chat the s. E. C. Prefers an approach to Digital Assets. That through facts and circumstances rather than a bright line test. This company by Company Approach suffers from the charm and inefficiency for third world power structures. Innovation is still occurring in america, capital is fleeing not to avoid our regulations but to find efficient regulatory clarity and theyre finding it elsewhere. We need a simple set of rules that apply clearly to all. Thats the premise of a bill and i know you wont talk about. But the framework that the market needs. Where is the capital going. Places like singapore, uk, switzerland, have laid out clear frameworks for Digital Assets. Meanwhile, the united states, hundreds of companies await no action letters with only two having been issued thus far by the s. E. C. I agree with you that is ico situation represents bad outcomes. The root issue remains, america does not have a clear regulatory framework. Consumers and investors are harmed by that status quo. Director purse nailed the explanation. The s. E. C. Should not only be concerned about fraud but also about opportunity. Our failure to provide regulatory clarity fails americans on both counts. We have not become the worlds land of opportunity, the best destination for goods, intellectual property and more by anarchy or by inaction. With respect to Digital Assets its time for deeds not words. Director purse, in your opening remarks you said enforcement is a poor way to announce policy. Would a law passed by congress be an effective way to announce policy . Wouldnt that better enable the s. E. C. Or for that matter other regulators to focus on consumer Investor Protection . Its always better to have a clear law that spells out what is and is not permissible. I think that enables people to make decisions around that law and we can enforce around that as well. Thank you. And commissioner jackson, you referred to essentially the same sentiment that, you know, what the law is provides the signals for the market. And thats why ive introduced the token taxonomy act. It has broad support that provides a simple set of rules that apply equally and clearly to all. Moving on to another concern, last congress i introduced the market Data Protection act. Which passed the house, but unfortunately did not clear the hurdle in the senate. The bill required the s. E. C. , fenra and the operator to safeguard market data before the consolidated audit trail could accept any such data. This spring, congress loudermilk who just spoke with you from our side of the aisle sent a later seeking the same assurances. Im submit further questions on this critical risk for the record and your response. Im encouraged by the direction that the s. E. C. Has taken on this. When you look at what was taking place when you first came in, i remember your first time here was one of my early hearings on the committee. And you had just found out, just been news that well prior to you taking office, there had been data breaches of the system. Even the internal controls inside the s. E. C. , just like all the controls once cybers there highlight how important it is to protect, you know, diminish the amount of information thats collected. Then you have to safeguard it. I appreciate the attention youve paid to separating personally identifiable information from that data. When you link the two concerns ive talked about, i do hope that blockchain can play a role in the Data Security concerns the country has. I believe if we provide the regulatory clarity that the market is clamoring for, that well see an era of flourishing and blockchain much like what our country has seen with the internet. Americas interests were highly advanced by providing that regulatory clarity. Otherwise innovation will happen else where. I believe failure to act has accelerated that transition. With that, i yield. Thank you. The gentleman from illinois, mr. Foster, is recognized for five minutes. Thank you, madam chairwoman. Thank you to the full commission for appearing today. Commissioner jackson, theres been a lot of talk about mandatory arbitration of late, as you may have heard. The house has recently passed the fair act. And im sponsoring the investor choice act, which would prohibit Public Companies from requiring mandatory arbitration in shareholder disputes. Can you say from your perspective, can you tell us why allowing individual enforcement of securities laws and our courts is good for the public . Thank you, congressman. Thank you for your leadership in this area. Its extremely important. For me, heres what this comes down to. What were trying to do is deter insiders from committing fraud. Its good for the market, the companies and its good for investors. Theres many different tools we have to achieve that. We have public enforcement of the securities laws which our staff work that every day. We have private enforcement of the securities laws that occurs in our courts. To those who want to do less with private enforcement, you kind of have three choices, you can be for public enforcement, private enforcement or fraud. And i, sir, would prefer the approach weve taken which is a mix of private and public tools. Isnt it true that individual suits on issues related to corporate fraud help a very large portion of ill gotten gains to investors. Yes, the amount returned through private lawsuits is quite substantial and compensates american investors all the time. Its my understanding that currently there are few, if any Public Companies that require mandatory arbitration in their documents. This bill would be codifying longstanding practice, is that also your understanding . Without commenting on particular legislation i think it would be important to send a clear message to companies about what the law is in this area. To the agree that pending legislation would do that id be very supportive. Yes. Chairman clayton, id like to bring up the issue of the consolidated audit trail again. First, could you give us a brief schedule update, you know, which has not been a thing of glory for the last decade. Yeah. So its way behind where it was supposed to be. But weve made some ground recently. I think weve coalesced around the schedule with the sros. What are the key milestones there . Theyre a series of milestones. I cant remember them off the top of my head, but it starts with basic data and goes to a more complex thing. Its essential a series of lets just say three to four milestones that we now have clarity and agreement on whether on when we expect them to be completed. We recently posed i want to thank everybody supporting this. Recently proposed a rule that would align financial incentives with keeping to those milestones. I think one of the issues here is that the financial incentives and the obligations may not have been as aligned as you would have wanted them to be. Thank you. One of the key issues here has to do with the beneficial entity behind the trades. And its my understanding from your testimony that theres been some motion in terms of the personal identification of individuals there. And theres two issues. Do you have have plans on having a unique identifier for every Market Participants . We would what we want to have is enough individual information where you can see where the trade is coming from. I think what we said is unique identifier what would be a unique identifier with the intention that no trader should be able to operate multiple unique identifiers internationally . That seems like its a tough nut to crack. Yes. Yes. Thats a we want to get there. What is your plan and what is the status of International Agreements that might allow you to get there . Now, youre raising another question i think, which is if people outside the u. S. This bothers me. No, clearly you can manipulate a price in the u. S. And make a derivative in london and unless the regulators can see its the same beneficial person, then it doesnt regulation doesnt work. You must v plan in the works to deal with that, i assume. Whats the status of that . We need to deal with it. Do i have a specific plan . No, but its an issue thats very important to me. Thank you, i yield back. Thank you. The gentleman from north carolina, mr. Bud is recognized for five minutes. Thank you, madam chair. Thank you to our witnesses here. Chairman, its good to see you. Thanks for your work at the s. E. C. I was pleased to see you take appropriate oversight of proxy advisors and establish much more needed rules for the road in the recent august 21st guidance. Proxy firms have gained power in the last few years and im sure that fiduciaries are relying on their information which contain incorrect information. I urge the commission to expand efforts to increase transparency and to proxy advisary firms and provide information to support the decisions. In your view, what more can the s. E. C. Do in this arena and how can the Commission Work with congress to bolster these efforts . So let me start by thanking the commissioner who has taken the lead in this area. And then in response to your question, i think the round tables that we had last year got a lot of input from various Market Participants. Really show the areas that need attention. Do investors understand how the securities that theyre invested in are being voted . They should understand that. Is our proxy where it should be . My answer to that is its not. We should be able to know that when theres an election the votes that are being cast are, indeed, representative of the number of shares and the ownership of those votes. You know, we should be able to solve that problem. I think thats fairly straightforward. And then, you know, just overall hygiene around the Engagement Process and how we cab calibrated correctly. We havent looked at the process with any great rigor in about two years or so. So a lot has changed. We have the internet. We have dissemination of information very quickly. We probably shouldnt have rules that were written for the mails. Thank you. Commissioner royceman, i want to thank you for your leadership on this issue. You just got a nice shoutout on that. So same question. Does the recent guidance from the s. E. C. On proxy Advisory Firms address this issue . What more can be done . Thank you for the question. I think the chairman did a good job of summarizing where we stand. Weve had an interest in this area for a long period of time. I think many congresses have as well. The ngos report delved into this. What id say is what whe did in august was an important step. Weve heard suggestions, things like confirmation, making sure that when people vote, those votes are counted. I think thats critical. Things along the lines of potential other rules to shareholder engagement. To the extent that we get more comment on it, wed always put that in and make our best decision. Thank you very much. Commissioner purse, again, welcome. So in april, finhub published a framework contract, analysis of digital networks, for determining whether or not the s. E. C. Would consider a Digital Asset to be a security. In a Statement Released alongside your framework, your colleagues indicated that the framework is not intended to be an exhaustive overview of the law. But rather a tool to help market partisan participants assess whether the laws apply to the sale or resale of a particular Digital Asset. Based on your decisions with Market Participants, has the guidance helped resolve their most important questions . Would it have been more useful to indicate in the framework how the s. E. C. Would weigh these factors . I think waiting is one of the things that people have told me they really would like to have. The guidance was well intentioned, wanting to give more clarity, but i think it did muddy the waters. Thank you. So last question. When can Market Participants expect an exhaustive overview so they can get the certainty to innovate american jobs. As i said earlier, im hoping we can work to create some kind of safe harbor. But im open toe other suggestions about ways we could provide clarity, particularly for utility tokens when i think are different than some of the other types of Digital Assets we sometimes think about. Thank you. I yield back. Thank you. The gentleman from illinois, mr. Caster is recognized for five minutes. Thank you madam chair and thank you all for coming here today. One of the first hearings we had here was with jay powell and the had heard shortly before that day on the Science Committee that i also sit on that if we eliminated all co 2 commissions tomorrow wed have two feet of Sea Level Rise baked in. Its not only coming but its accelerating. I asked chairman powell, whether we should think about 30 year mortgages in miami differently than in denver. His response was something along the lines of thats a good question. I mention that because the i have a real concern that we dont properly evaluate the risks that companies are exposed to from Climate Change and its why i introduced in the house the Climate Disclosure act to try to quantify that risk. Commissioner jackson, we know that esg protocols provide qualitative disclosure of climate risks. Do you believe that adding quantitative or consistent disclosure is a good thing . Without commenting on any particular pending legislation the answer is