[applause] thank you are coming. Its my pleasure to introduce to you, commissioner michael bueller. He was appointed to the Security Commission by president obama and is sworn in an august 2013. He was delegated by President Trump to be in german in that capacity from january 23rd of this year to may 4th. His term expires in june 2018. Previously, dr. Pirowar worked at the sec in the office of Economic Analysis with the division of economic and risk analysis as an academic scholar from iowa state university. He was a professor of finance at iowa state university, earned a ba in Foreign Service in International Politics that can take an from georgetown and phd from penn state. Today we are not going to have a set presentation, but instead a formal question and answer format. Im going to ask mr. Pirowar a number of questions and then we will open it up to the audience so you all can participate in the discussion. Commissioner pirowar come with the new chairman of the securities and Exchange Commission. What do you like to work way and what do you think will be the priorities of the securities and Exchange Commission . Thank you your judge for the great event. I look forward to questions from the audience and anyone whos ever seen in sec commissioners beat knows whats coming next. These do not miss their effective visit and the commission are my fellow commissioners. Think back to before the election from the way the commission is headed. We were a commission headed by a chariot cared about enforcement first in the doddfrank death march 2nd. Meeting new chairman chosen by the president by the agenda to protect investors and efficient market intent to nominate the incoming chairman and chairman claytonspeech with the Capital Formation is a broad theme we will continue to work on it the sec. Interns that the sec, are you all taken steps to talk through any kind of legislative agenda . Sure. Some of the things we would like to do. Obvious the terminal set the agenda, but he an idea to commission are working to find the Capital Formation agenda. Theres a lot that we can do that does not require legislation. One example is something we parody done better new director of the division of Corporation Finance bill in maine on behalf of the Division Announced a week or so ago that we are going to extend the relief for companies that want an ipo on a confidential basis so companies can file in a nonpublic basis for people to know they started the filing process on an ipo. It was something for emerging Growth Companies. And regardless of size they want to listen United States as well, too. The onepiece people have been focused on him only extends confidential filing, but also followon offerings that occur within the first year of an ipo. That was Just Announced i believe a week and a half ago. We are to have company said it decided to take advantage of that. We have companies on a nonconventional basis and confidential filing for a follow offering. We already seen some of the things in that space. There are a number of issues we are looking at. I dont want a front on the chairman in terms of all of those issues, but what is important to know is the action last week shows that not only are there things that we can do, but the action last week didnt require a commission vote. As a number of things that can be done at the staff level. Im very excited whenever new Corporation Director to actually start moving on some of those items that dont even require a commission vote. We will see what we can do it this staff level and thirdly what requires legislation. Regulation is not the largest raising capital in this country for about 123 trillion annually. Are there things in your judgment that commitment to improve regulation . First of all and foremost, we need to tell the public that we are not going to move forward on some proposed amendments in 2013. The prohibition on general solicitation and 2013 prior to joining the commission at the same time, they proposed additional amendments that would have some enforcement for a better football to the registration process giving people some pause in terms of whether or not thats going to go final or not, whether some think it is final, though we are not going to move forward on the amendment didnt give people regulation, offerings without being put in a timeout. I think theres some things we can do to signal it. I personally have been in venues like this telling people if no interest in moving forward on the regulation did of course cannot present investors and private offerings, but there is also investors that is according to the terror analysis, rarely used. One of the reasons for that is the sec has never provided very much guidance as to what constitutes sophistication for the purposes of regulation. Its been increasing talk about providing with respect to what constitutes private accreditations or you have a test or a graduate degree in finance or what have you. Do you think there would be some openness does not at the commission . Or do you think it is best pursued by congress . I dont know in termsof i cant speak on behalf of my fellow commissioners, but ive questioned even the premise of having an accredited versus nonaccredited investor. The rationale for this Commission Prior commission until we change it believe that somehow we are protecting investors by prohibiting them from investing in certain highrisk securities. Ive been questioning that premise because as we know, highrisk also equals higher expected return. What we are doing is always protecting end quotes. You dont have to look to Silicon Valley to see all the unicorns out there that are tracked large amounts of private capital. I was just out in San Francisco and the amount of private capital people are willing to throw at these companies is amazing. At least Silicon Valley doesnt seem like their access to capital. My perspective from the momandpop investors are cherry ninnies returns to these companies and the companies are taking much longer to go public and in some cases the average investor is being prohibited from securities. Some people may counter that and say they expect a return but they are too risky to that the average investor investing. You mention as a former finance professor, will be teaching portfolio, the benefits of securities with provide diversification for investors in their existing portfolio and that has been sending trained to press the attorney at the sec to think about. Hopefully a lawyer driven agency and for historical reasons, weve been thinking about risks in terms of individual security offering. Think about the Disclosure Requirements, whether perspectives in a 10 k. Or some other filing. Ive been trying to get people to think more broadly to say look, its not just the risk of security and isolation, but risk with a portfolio that a customer would he has and if this is the mood to have come even though at a higher Risk Security and isolation, it can get portfolio diversification return. Id like to question the premise of these artificial distinctions. You raise a think a very good point in that companies are not going public are going public much later in their life cycle. A lot of the big games are basically limited to accredited investors at the top 7 roughly of the american people. That raises the question of what can we do to make it more likely that a company will go public . We now have approximately half the numbers we had 20 years ago at the number of ipos present measured by actual number of offerings or dollar amount or way down compared to a couple of years ago, to where they were 15 years ago. So what sort of things do you think we can do to make being a Public Company mark tracked live . Those statistics are the type of statistics when jay clayton met with thenpresident elect donald trump and now President Trump. Those are the type of statistics mentioned in the type that were so shocking to the president that he wanted to have a new chairman to come in and try to think about regulatory fixed income to improve upon those numbers. So there are those that say theres really nothing the sec can do because there do because there is not grow things going on. Huge returns of scale, winner take all. A lot of Tech Companies dont undergo public. They just want google and those types of things that you hear all the stories. I still think there things we can do and is evidence to back him a look at the jobs act. They mention we expanded the confidential filing to include some of the other companies when the jobs act when drew and it allowed for confidential filings, we had Something Like bb bioTech Companies went public within the first year. That shows that small changes to the Regulatory Framework can have huge effects and so we are looking for what are potentially some of those next changes that we can do to help facilitate Capital Formation, which again is part of our mission. In terms of things that we can do, ive actually for the last through critics have been playing Capital Formation listening to her in new york, Silicon Valley, San Francisco during tech week on investing in Technology Companies in the arizona panel talking about how we can increase geographic diversity of Venture Capital financing to start small and emerging Growth Companies that would go public because most of the venture cap is occurring in boston. So i think, what we need to do is continue to listen to people. Focus and heritage, and the various interest groups. You tell us what we can do but sit around in the building in washington d. C. And dream up what we think are important things to do. What is most important for us is to get out there and hear from people as to what you are finding that the impediment to Capital Formation. On that note, i mentioned the amendment a couple times, director of corporate finance, hes been telling people he wants to accomplish three things. He wants to make the division more transparent and more collaborative. He wants to challenge the staff to get the review filing process more efficient, quicker review problems, was to be more transparent in terms of getting out and talking to people. Silicon valley San Francisco the same time i was talking to people out there about expanding the confidential filing that he wants to be more collaborative. If you think about the last eight years the relationship returning the regulated in the regulators has been very much confrontational near the Capital Formation is wanted in particular we could benefit from more and more collaboration. We will take more meetings with people. Listen to more ideas from many people that want to give us ideas that we can do when things were doing. Truth be told, the staff has been wanting to be more and more collaborative with the change in the tone at the top from a new chairman coming in to say this is the way we are going to work at the commission. Well, there has been a number of, i guess, possible corporate identified. One is the Disclosure Requirements under regulation s. K. The fcc recently released a study that was required by congress. Some of those requirements are also doddfrank, particularly the politically motivated disclosures, for example with respect to conflict minerals, extractions come as ceo ratios and so on. Resume favorites. I figured that. The event do you think there is room for meaningful improvement in the disclosure regime of the governing Public Companies at this point . Yes, those are once when i was at ensuring they try to target to make those rules less burdened some should congress not choose to repeal. The first best from my perspective would be congress would help depoliticize the sec by getting rid of those motivated with materiality. And investors to make informed decision. The first best would be for congress to repeal, which would be fantastic. There are things we can try and make it less burdensome as possible. Then pay ratio open a comment. On those two feedback from the public in terms of we kept hearing folks that they were particularly burdened some are things we could do. We have extensive authority in the numbers bases potentially providing some sort of skill disclosure or just outright notions for smaller reporting and some of the ones where the burden of fixed cost of compliance is proportionately high. The sec estimated the cost to be a Public Company today. If you are a Small Company it, that is an insurmountable burden, with the sword of the normal ratio is like 10 million of shareholders. One of the things that was striking out as a 1 billion plus valuation. The private Company EntireLegal Department is to people. This company had 12 shots because they had a bunch of millennial spear the ratio of shots to legal with six to one. Thats probably a good ratio. They require them to disclose the ratio. But it was striking to me. Imagine a company of that size, a Public Company but have an army of people, Investor Relations and the like. Another saying that is constantly a reference is a problem in the other jobs act or the internal controls reporting and in fact you see a tremendous number of companies that went private in the decline in Public Companies really dramatically accelerated at that point. Do you see room for improvement there . Perhaps making the emerging Growth Company exemption permanent instead of a fiveyear layoff . The macquarie then revisiting for which they have to comply with lee. It is clear they did have benefits for companies, but the cost side with a lot more than anybody anticipated and the costs are very high fixed cost you no matter what the size of the company is, theres things they all have to do. Those costs will disproportionately on the Smaller Companies. It would behoove us to find out where that sort of cost benefit ratio is. For some large companies, the benefit outweigh the cost and its okay for them. My preference would be if we had private ordering to figure that out. Sarbanesoxley for a long time now. If we can at least exempt Smaller Companies up to a certain threshold and not prohibit them, if certain say we are willing to incur the cost because we take benefit in terms of the information out there for terms of investors are so comfortable and let them do that. I think it would behoove us to actually increase the threshold to the point that we conservatives see where companies benefits justify the cost. Former economic commissioner once read an article called blinded by the light. The premise of the article being the disclosure documents have become so massive that the relevant information is getting lost in hundreds of pages of dense legalese. Or disclosure documents to obfuscate rather than inform. The link of the case is dramatically increased. Ive seen some estimates that say that by a factor of two. So, do you think it is a fair criticism of reforming regulation s. K. Is going to hurt investors or do you think it can both simultaneously reduce the burden and improve the accessibility of the Central Mission . The latter. I couldnt agree with the former commissioner on that. If you look at the size of the 10 k. And our perspectives and try to find useful information in there, it takes forever to find information. Somebody recently gave me the perspective of walmart when walmart went public in the 1960s. The entire perspective is 20 pages long. One said this page left intentionally blank. Theres a lot of useful information in a strip toward, but a lot of redundant information. We have several making some progress that would help clean up some of that and allow the more Material Information to rise to the top for people to find that information and to become politicized from a number of folks on the far left with less information, less redundant information is going to be giving less real information to shareholders. Weve seen what the pay ratio the disclosure that is being grown in merit that is not providing good information to shareholders and something we need to constantly be vigilant about and i think we can actually move forward with real reforms and get rid of some of this stuff. Accounting principles change over time. Industries change over time. It is up to us to keep up with all of those changes. Some of the risk factors become boilerplate. One company has to risk your and so now you have a list of 21 risk factors with everybody in the same industry rather than very good meaningful information. It is interesting to me, historically the notion that materiality came from a famous Supreme Court case cb northway, that where there was a decision by the Supreme Court written by ben Justice Thurgood marshall and i talked about materiality has to have a limit there, otherwise you think everything is material are potentially useful within i