Right.

Well, so, Andrew, I'm really focused on the long term.

So in the last year and a half since I've become chairman, there's been a whole change of attitude.

And so and we have had 583 companies go public in the last year and a half.

That's up 75% from the previous year and a half of the last part of the Biden administration.

And then the amount of money is $208 billion or so that these 583 companies have raised.

That's very exciting.

this tokenized world ultimately working?

[clapping]

Well, uh, well, thank you, Mike, and, uh, thank you, Mr.

President, for, uh, for having us, uh, here today.

From day one, you've made our nation's financial dominance and innovation job one.

We at the SEC are delivering on your agenda.

We're making IPOs great again, to continue on your theme, by cutting red tape that discourages companies from going public.

Under your leadership, Mr.

We're doing great even despite the fact of what's happening with interest rates.

Is that true? And if so, why? Is that good or

bad? Well, so we have right now about 40% fewer public companies than we did 30 years ago.

And that's because it's kind of more comfortable, let's just say, to be a private company.

There's a lot of capital out there among institutions like insurance companies and private equity firms and family offices and foreign sovereign wealth funds and things like that that are looking to come to the United States to invest.

And we're so lucky in the United States because we have good rule of law and enforceability of contract.

And people feel that our markets are transparent and they can put their money here and it's not going to get ripped off because the SEC and the Department of Justice and others are out here as policemen to try to track the ne'er-do-wells down and hold them accountable.

So that's attracted money from around the world.

Why is it important that America leads the way here, whatever leading the way means?

How do you attack that and get these companies to come public earlier in sort of their growth phase?

Well, that's our whole approach right now because I started out as a young lawyer in the 1980s when there was a big growth of IPOs, a huge spurt.

But, you know, if you look now at what is in the private markets, a B or C round would be a big IPO way back.

then.

And so that's because it's comfortable to stay private.

There's lots of capital kicking around there in the private markets looking for a home.

So that's great.

I mean, I wonder, do you think about sort of giving the average investor more of an opportunity to have access to the private, so-called private markets?

A recordkeeping utterly flawless.

Exactly.

And, and ver- validated, again, by the various, uh, you know, parties that are a part of that, uh, that public blockchain.

So that's all, you know, very important, I think a huge step forward.

But, and, and so the, the various tokens that people, the coins or whatnot that, uh, people have come up beyond, uh, Bitcoin, uh, you know, it, it, I, I'm pretty agnostic about all of that, and that is, you know, the, the market will tell whether those will come and go or, and, or, and whether they'll thrive or not, um, as to particular ones.

But I think the, uh, the distributed ledger technology is a huge advancement for efficiency and for, um, uh, cost savings and certainty in financial services at least.

So what's happened over the years, because, um, it was very unclear in the previous administration as to whether or not it was a security, the, the tokens, and, and again, that was when people were looking, just compare it back to Mr. Howey and his oranges.

Mm-hmm.

Just what does this mean for Americans when it comes to their own investing?

Well, first of all, hats off to the President and Secretary of the Treasury Scott Besant, to Ted Cruz and other folks in Congress and elsewhere in the administration who really pushed this idea, and then others in the private sector who have been advocating for this for years, and then now philanthropists who are stepping forward.

So I think this is a really seminal time in our nation's history and even better frankly than Medicare was back in the 1930s because this is rather than a government program and obviously we can have a long conversation about Medicare, but this is based in the markets and it is basically trying to encourage people to have a vested interest in our whole economy from an ownership perspective, so giving people a stake in it.

And so going back to, say, Margaret Thatcher, who was a real proponent in Britain for privatization, for the same thing, to let's spread the ownership of companies throughout the population so people feel like they're invested and then they can really watch their through the compounding of of their dividends and remaining invested they can see how that rises over time much more quickly than sticking your money in the bank much better than sticking it under the mattress and so it's it's proven over time and sure there are ups and downs in the market but over the long term you will uh you know reap more benefits uh than otherwise

But I had a moment as I was doing this thinking, why can't this be Social Security? Why do we have to have a public fund for Social Security where I'm not seeing these types of returns? Would you support more of this for more Americans, not just for young children?

Well, you know, other countries are realizing that they can't afford a social security system like what we have, because basically with declining birth rates, so you have fewer young people.

I mean, basically the pyramid is like inverted now from what it was back in the 1930s.

And so you have fewer working people supporting and expanding a greater population.

Can you expand on that or tell us what your views are today, given that we're a year later and the rule is still in its preliminary stage?

Sure.

I'm happy to chat about that.

Um, so, uh, you know, I, I don't wanna have people be too sanguine about, uh, you know, how, what the significance of this rule and the potential, um, you know, ramifications if it be adopted in its, uh, um, you know, current form.

Uh, because even at, e- the, in the, uh, uh, in the proposal, the, uh, economic analysis, I mean, that's made by the SEC itself, which usually tends to be, let's say, rather conservative, um, uh, is that it will double the cost of disclosure for annual reports for public companies, you know, basically across the board, whether or not they're involved in things that normally affect, uh, you know, the environment, like think of energy companies or whatever.

But this would be up and down the line, especially because of the broad scope of, uh, of the proposed rule, um, and its, uh, invasion into Reg SX, for example, uh, without really involving FASB, uh, and which of course, I mean, the SEC can do what they want to, what it wants to.

Um, but then also, um, you know, this really expansive reading of the commission's authority, uh, and then also, um, uh, with respect to, I think its, uh, evisceration potentially of the whole, uh, standard of materiality and how the SEC has approached that, um, you know, for the past, uh, you know, 80 years or so, whatever.

Actually on the 4th, which

is a fabulous thing.

Talk about that, how you see it.

Well, Trump accounts reflect the essence of what American capitalism is about, about savings and investing for the long term.

And that's what separates our capitalist system versus any other sort of system out there around the world.

And so we have to remember that America was an investment before it was a nation.

Yeah.

Also, you are promoting, you don't have any problem with cryptocurrency, and the SEC is, you're overlooking it, but you're not fighting over it, and it will flourish in the U.S. Well, so the

It's not because of you, is it?

No, it's right.

I mean, the tone has changed, obviously.

Um, and tone means a lot in the marketplace as, as you know, um, market sentiment.

But, uh, uh, we're looking at the long term.

We had...

So our new, uh, corporation finance director compares it to this old house where, you know, we're out to scrape away the layers of paint on the banister and the doors that don't work and whatnot to make it go back down to the wood, put the primer on, and then the finishing coat to, uh, to really make our whole system more practical, less complicated, less expensive, and to, uh, drive, to draw people out from in, in the private, uh, ca- uh, markets into the public markets.

And so th- this would do it, wouldn't it?

Uh, but I don't think there's any reason we can't have these technologies built here in America.

I agree with that.

And from, uh, from my point of view, there are so many benefits to come from distributed ledger, ledger technology for the financial services industry, where we're right at the cusp of achieving a T-zero, basically, you know, immediate delivery versus payment, receipt versus payment on chain by, uh, you know, digital assets.

And, uh, so that's pretty exciting.

Uh, what we may even have to build in speed bumps, uh, you know, to prevent fraud and, and things like that.

But for many and for some instruments, it might not be possible, but your, uh, discussion there, twenty-four/seven and all that, I think is, is really an exciting, uh, prospect.

But there are challenges from, uh, you know, the liquidity perspective, uh, you know, having a, you know, the whole concept of best bid and offer, what does that mean? Uh, so, uh, you know, that's one that, uh, we will, we will be wrestling with.

Oh, please

How do we reverse that? How do we get back to broader and more affordable?

Well, so we're talking about companies, uh, becoming public, and so today, we have about half the number of public companies as we had 30 years ago.

And, um, and so that comes about, you know, you have mergers and acquisitions and you have bankruptcies and, and whatever, but so that takes, um, you know, the, uh, companies out of that, uh, um, population, and if, unless you have new ones coming in to replace the defunct ones, uh, then, you know, you're gonna have necessar- necessarily a diminishing, uh, number of, uh, corporations.

So, um, over, uh, what I'm, uh, suggesting here, uh, and, uh, is that we address the reasons why people don't want to go public.

It's, uh, so the idea is to make, uh, IPOs great again, initial public offerings great again, and to, uh, make it cool to be public again.

And the reason why, uh, people do not wanna take their companies public is one, the high cost of, uh, abiding by the regulations, uh, that the SEC has, uh, imposed over the years.

Uh, two is the litigation, uh, issues, uh, around, uh, you know, a lot of, uh, frivolous lawsuits, let's say, that are filed against public companies because lawyers, uh, know that they can extract, uh, some, you know, settlement and, and then get contingency fees out of that.

Is that set to change anytime soon?

How do you plan to oversee and make sure that that's done in a way that isn't potentially punitive for people who are retiring at ages where they need a lot more money for a lot longer?

Well, on, on that issue, uh, we've heard a lot of, uh, input from both the investors who want access to, uh, private, uh, the private markets and to those sorts of products and obviously from the, uh, people who are producing, uh, the products who, uh, you know, are about to meet that demand.

So, but we have to do it carefully, uh, I think, because of course the private markets are a lot different than the public markets.

Um, their liquidity is not the same.

There are all sorts of, uh, things, the... for people who are not aware of the rules of the road, uh, where they could get hurt.

And so, uh, we will work very closely with our, um, counterparts at the Department of Labor who have, uh, oversight over ERISA accounts, uh, to make sure that, uh, you know, that we have, uh, appropriate guidelines around these various products.

And they're really for, of course, long-term investment, uh, especially private equity and things like that.

I would love to know, are you under any pressure from this White House and what would be your advice to Jay Powell? 'Cause it seems like you have a better relationship with President Trump.