Oversight of the Securities and Exchange Commission

If we could ask everybody to take your seats, please. Committee on Financial Services will come to order. [Gavel sounds.] Without objection, the chair is authorized to declare a recess of the committee at any time. Today's hearing is entitled Oversight of the Securities and Exchange Commission. Without objection, all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record. I now recognize myself for four minutes for an opening statement. Good morning. I want to welcome my longtime friend and our chairman of the SEC, Chairman Atkins, and thank him for joining us today. The SEC's mission is clear: to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. At its core, this mission is about fostering public confidence in our markets. These are not suggestions, they're not partisan preferences, they are the statutory mandates enacted by Congress. Unfortunately, during the Biden administration, the SEC strayed from this mission. Instead of focusing on its core mandate, the Commission pivoted towards politicized rulemakings that stretched far beyond the bounds of those core statutory authorities. A great disappointment, former Chair Gary Gensler, we witnessed a Commission that relied frequently on regulation by enforcement rather than transparent rulemaking. We saw attempts to embed political and social objectives into securities regulation, all at the expense of American investors and small business owners. The consequences of this approach speak for themselves. Coupled with crushing compliance burdens, these policies accelerated the shrinking of our public markets. Since 2021, the number of publicly listed companies in the United States dropped by 10 percent. Leading entrepreneurs found their capital for growth in private markets, delaying opportunities for America's individual investors, small institutions, our unions, our 401(k) plans, to have more investment choices. And that cutting-edge innovation was driven offshore by often regulatory uncertainty. That's why in December, the House advanced the INVEST Act. This strongly bipartisan legislation is designed to reignite our capital markets by cutting red tape, empowering entrepreneurs and small businesses, and expanding investment opportunities for all of our citizens. I want to commend Chairman Atkins for his efforts to reverse the prior rulemakings that hindered capital formation and for steering the Commission back onto those fundamental enforcement responsibilities. These actions align with committee Republicans' commitment to fostering efficient, transparent, and innovation-friendly markets that protect investors, provide regulatory clarity that markets need, particularly in emerging areas such as digital assets. It's imperative that Congress provide a functional and durable framework for digital assets. We look forward to sending a market structure bill to the President's desk in 2026. Today, we'll examine recent actions taken by the SEC and provide members with the opportunity to address any questions or concerns regarding the Commission's current trajectory. We'll also assess the SEC's approach to the digital asset regulation, examine steps being taken to depoliticize the proxy access process, and to review internal reforms of the Commission itself. Our shared goal is straightforward: a marketplace where investors have the information and protections that they need to participate with confidence and where American businesses can access capital to innovate, expand, and create new opportunities for both jobs and investment. I look forward to hearing from Chairman Atkins, and I yield back the balance of my time. I now recognize the ranking member of our committee, Mrs. Waters from California, for four minutes for an opening statement.

Thank you very much, Mr. Chairman. You and I have a very different understanding about what is happening at the SEC. Chairman Atkins said it is a new day for the SEC. What did he mean? Did he really mean that this SEC is now putting Wall Street and billionaires first and America's investors last? Since his tenure began, Chairman Atkins has withdrawn 14 major proposals that would have protected retail investors, dismissed cases and investigations against Trump's crypto billionaire friends, pared back corporate disclosures that provide the public with critical information, moved to let private equity dump their failing investments into unsuspecting investors, restricted shareholders' ability to influence the companies they own, halted the SEC's defense of the climate disclosure rule even as the wildfires in California show there are material risk, and cut SEC staff by roughly 20 percent. And at the same time, the President, along with his family and closest advisors, continue to enrich themselves through what appear to be insider trading, self-dealing, in both the equity and crypto markets. The SEC under Chairman Atkins has yet to investigate a single instance of the potential large-scale fraud and market abuse being brazenly carried out by this administration and its allies. The SEC is also supposed to be an independent commission free from political influence. At his confirmation hearing, Chairman Atkins said, "I want to take politics out of the financial markets." And yet, in many of his public speeches, he has repeatedly pledged his loyalty to Trump more than 16 times. That is remarkable for the head of a supposedly independent agency. Additionally, today the SEC does not have a single Democratic commissioner. And again, this is extraordinary. And the SEC is not making policy in an open and bipartisan manner with the usual public notice and comment process. Instead, Atkins' SEC appears to take its orders directly from the President and avoids public comment at all costs. None of this should come as a surprise. Over the past year, the executive branch and Congress under Republican control have become nothing more than a rubber stamp for carrying out Donald Trump's personal agenda. From his arbitrary and inflationary tariffs to the use of public office to enrich himself and his friends through corrupt dealmaking, to the weaponization of the DOJ against political enemies, to repeated attempts to undermine the midterm elections, to sending his own personal brownshirt-style army into our communities that have killed Americans and terrorized our cities and towns. It is clear the federal government no longer functions for the people and by the people. It functions solely for Trump and by Trump. By not enforcing the rule of law against the President and his friends who are openly engaged in grift and corruption, Chairman Atkins is aiding and abetting this reckless and unlawful agenda. Chairman Hill, it certainly is a new day at the SEC, a Wall Street and billionaire holiday. I yield back.

Gentlewoman yields back. Chair recognizes the chair of our Capital Markets Subcommittee, Ann Wagner, for one minute for an opening statement.

I thank you, Mr. Chairman, and welcome, Chairman Atkins. It's good to see you again. First, I want to thank you for putting capital formation back at the top of the Commission's priorities. Your new pro-growth agenda will make it easier for companies to go public, increase investor opportunities, and support innovation and entrepreneurship throughout the United States. My bipartisan INVEST Act will cement that work. We're giving the American people more investment options. We're giving American small businesses the ability to expand. We're getting big government out of Main Street's way. Our bipartisan reforms in the INVEST Act and your regulatory reforms at the Commission could not be more aligned. And I thank you for your partnership in these efforts and more. I yield back.

Gentlewoman yields back. I recognize the ranking member of our Subcommittee on Capital Markets, Brad Sherman of California, for one minute for an opening statement.

Mr. Chairman, a lot of people are concerned about the reduction of the enforcement staff at the SEC because they're concerned about the honesty of our capital markets and the role they play in the economy. But others, I think, are concerned about how your cutting back of that enforcement could lead to the impoverishment of our President Donald Trump. You see, the way it's supposed to work is you're supposed to begin the investigations of those who are defrauding our investors. Then those who are likely to face criminal or civil penalties have to buy a lot of Trump Coin. This then leads to hundreds of millions of dollars of profit for Donald Trump. We've saw this with Justin Sun, we'll see this with the Winklevoss brothers, Brad Garlinghouse, Mr. Zhao. But it all starts with you. And so I would urge you to reinvigorate your enforcement, catch those who are defrauding investors, and make sure that Donald Trump can make hundreds of millions of dollars each and every month. Thank you.

Gentleman yields back. I'd like to recognize myself for a point of personal privilege. I want to thank two of our senior leaders here at the House Financial Services Committee that have served so well both the committee and our members. First, our counsel, Kyle Smithwick, started at the Financial Services Committee as an oversight counsel before quickly taking the reins of the subcommittee. He served as the committee's general counsel for former Chairman McHenry. We were lucky to have him on our team this Congress, and I appreciate his commitment to our robust agenda over this past year. We wish him the best when he goes to the U.S. Treasury Department. And last but not least, Brooke Nethercott is also departing the committee this week. Brooke served as our committee's deputy communications director. She's been integral to my team for several years, in which we've made significant progress on a lot of my policy agendas. She was my communications director for the Second District in Arkansas, and her energy and passion for Arkansas too is unmatched for somebody from Connecticut. The good news is she's not going too far. She'll go work for Chairman Seelig at the CFTC as the head of their communications group. So would you help me recognize these two fine people? [Applause.] Today, we welcome the testimony of the Honorable Paul Atkins, Chairman of the SEC. Chairman Atkins, we thank you for taking time to be with us. You'll be recognized for five minutes to give an oral presentation of your written testimony. Without objection, your written testimony will be made part of our record. You're now recognized for five minutes.

Well, thank you very much, Mr. Chairman. So Chairman Hill, Ranking Member Waters, and members of the committee, it's a great honor to testify before you today. Thank you for this opportunity to discuss the work of the Securities and Exchange Commission. Nine months ago, I returned to the SEC with a clear mandate to recommit the agency to our core mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. I am grateful to work alongside dedicated public servants who have hit the ground running in pursuit of these priorities. America's $124 trillion capital markets are the deepest and most liquid in the world. They are a marvel of human ingenuity. Yet over the years, rules have multiplied faster than the problems that they were intended to solve. This Congress and the Trump administration are focused on bringing down the cost of living for the American people, and the SEC has a very vital role to play in that. For example, public companies spend $2.7 billion a year to file their annual reports. This is $2.7 billion that companies are not reinvesting in their businesses to create jobs. $2.7 billion that our disclosure regime is diverting from your constituents to corporate lawyers, accountants, and consultants. Now, this is not to say that we want to gut corporate disclosure at all, which is vital. But we must modernize, rationalize, and streamline reports so that they are meaningful, understandable, and not a repellent to investors like this 10-K here from Entergy, which is just shy of a thousand pages long. After all, how many of you would read through an annual filing that this is certainly doubles or if not more War and Peace? Disclosure documents of this sort of length can do more to obscure than to eliminate. For context, shortly after I left the SEC in the mid-1990s, there were more than 7,800 companies that were registered with the U.S. SEC. By the time I returned as chairman, that figure had fallen by roughly 40 percent. So this trajectory tells a cautionary tale that the SEC is working to rectify through the three pillars of my plan to make IPOs great again. First, re-anchoring disclosures in materiality. Second, depoliticizing shareholder meetings. And third, allowing public companies to have litigation alternatives so that we shield investors from the frivolous and innovators from the frivolous and investors from the fraudulent. I also applaud the bipartisan initiatives before Congress, including those in the Senate's Empowering Main Street in America Act and the House's INVEST Act to help keep America's capital markets open, dynamic, and above all worthy of investors' trust. Of course, I also support congressional efforts to enact the CLARITY Act. Upon its passage, the Commission stands ready to implement this landmark legislation. A federal framework for crypto markets is long overdue. Under Commissioner Hester Peirce's leadership of our crypto task force, SEC staff has provided more clarity in the past year than in the total prior decade. But there is no action that we can take that future-proofs our rulebook more formidably than nonpartisan market structure legislation. As Congress completes this vital work, CFTC Chairman Mike Seelig and I intend to provide a bridge towards legislation. Through our now joint Project Crypto, we will consider a token taxonomy to offer both investors and innovators a clear understanding of their regulatory obligations. We will also look to consider exemptions that would allow market participants to move and to transact on-chain. Finally, and most fundamentally, capital markets thrive on many factors, but they endure on trust. So the SEC is returning its enforcement program to first principles of rooting out fraud and remedying investor harm. Since I rejoined the Commission, we have brought enforcement actions to address offering frauds, insider trading, accounting and financial frauds, and breaches of fiduciary duty by investment advisors. Since the formation of our cross-border task force in the fall, meanwhile, we have suspended trading in the stocks of 14 Asia-based issuers upon evidence of potential market manipulation. I'm working within the securities laws to protect investors from those who seek to use international borders to evade and undermine U.S. investor protections. Markets are global, investor protection must be as well. As I said at the outset of this testimony, the SEC is returning to its core mission.

Gentleman's time has expired. Thank you, Mr. Chairman. We'll now turn to member questions. I'll recognize myself for five minutes for questions. You referenced Entergy. We're proud of Entergy, the publicly traded utility that administers power in the state of Arkansas, for example, at a thousand pages for a 10-K. And you and I both have studied a lot of commentary over the years that Warren Buffett's made about the disclosure systems. I think we both quoted the exact same quote this fall after he issued a letter in November about the proxy. He said that there were a lot of overlapping rules that had caused the proxy to balloon in size and really, I think, diminish some of its informational benefit to shareholders. We compared on the committee 1980, 1990, 2000, 2010, and 2020 proxies for four or five companies that were members of the Dow Jones Industrial Average and the S&P 500 for all of those reporting periods, and they went from 15 to 20 pages to over 300 pages. What's your guiding force on as you look through the regulatory disclosure regime on how we can lower that cost? What's a specific element? You referenced it in your opening statement.

Well, thank you, Mr. Chairman. Yeah, well, it comes down to materiality. That's the bedrock of the securities laws, and it's written into 10B, Section 10B of the Exchange Act. And the most important seminal Supreme Court decision was written by Thurgood Marshall back in 1976, where he warned about the danger of information overload where, you know, if things are not stuck to materiality, which the court defined as what a reasonable investor needs to know in order to buy, sell, or hold securities basically or vote shares. And so that's really the bedrock. And I remember when I was a little boy, my father going through annual reports and whatnot, proxy statements. Back then, one could do that, and I really challenge anyone to—I can't even, you know, lift sitting here, lift two more than two reams of paper.

Thank you for that. So in addition to that, I think corporate governance has really seen a big change since you were on the Commission last time in the early 2000s in regard to proxy access and how corporate secretaries and boards deal with proxies being solicited for various proposals. And recently, the D.C. Circuit Court in 2024 decision in ISS versus the SEC held that proxy voting advice does not constitute a solicitation under Section 14A of the Exchange Act, effectively eliminating the Commission's regulatory over authority of the proxy advisory firms. This decision creates a significant oversight gap for an industry dominated by just two firms, both of whom happen to be foreign-owned, ISS and Glass Lewis, which control 95 percent of the proxy advisory market for institutional investors. Glass Lewis recently announced it will offer, open quote, "custom voting frameworks," close quote, tailored to individual client preferences rather than applying a uniform policy across all its clients. This pivot raises a fundamental question about conflicts of interest, the methodology, transparency, and whether investors receiving this advice understand the basis on which it's being provided. Does the Commission view this new approach as sufficient, or does it underscore the need for a different regulatory direction?

Well, thanks, Mr. Chairman. Well, we are definitely looking at this whole ecosystem, you know, with respect to corporate governance and shareholder proposals. And part of the problem, I think, with these advisory firms is that they're more of a symptom of the underlying problem, and that's the weaponization of shareholder proposals and those government sort of frameworks. So anyway, so we are actually actively looking at it, and that's part of the three-point program to try to make IPOs great again and make it cool to be a public company again.

If Congress were to amend Section 14A of the Exchange Act to explicitly cover proxy advisory firms, how would the Commission use that authority? What would be the methodology to have a rigorous standard for transparency?

Well, I think mostly it's fiduciary duty and, you know, living up to what their standards should be. Both of them now, I understand, are registered as investment advisors, so, you know, we have a hook there. But again, I'm happy to work with you all as you create—

Do you regret your vote during the first time you were on the Commission about offering a safe harbor for proxy advisory advice?

Well, actually, I voted no on that rule, and unfortunately, the safe harbor was the thing that turned the charge.

Yeah. My time's expired. Thank you for that discussion. Now recognize the ranking member for five minutes for her questions.

Thank you very much, Mr. Chairman. Chairman Atkins, on January 15, my colleagues and I sent you a letter detailing our significant concerns about the SEC's dismissal of over a dozen crypto actions. Our concerns are twofold. First, these cases were dismissed despite the fact that the SEC was winning in court, proving that the SEC's crypto enforcement program was well-grounded in the law. And second, that the people who benefited from your about-face were also people who gave millions of dollars to President Trump and his family. I am most astonished by the case of Justin Sun, founder of the TRON network. The SEC's complaint alleged, among other things, that Sun engaged in hundreds of thousands of manipulative trades to artificially inflate the price of his crypto token, TRX. In the fall of 2024, a federal district court judge found that Sun had defrauded TRX investors and that TRX is a security. Despite this holding, the SEC stayed its case against Justin Sun in February 2025 to explore a potential resolution. Well, while you were exploring a potential resolution, Mr. Sun has been busy ingratiating himself within Trump's orbit. He has invested over $75 million in the World Liberty Financial tokens and is the top holder of the $TRUMP meme coin, which earned him an invitation to the White House and a special dinner with the President. Just last week, a person verified to be Mr. Sun's ex-girlfriend stated publicly that she has detailed evidence that Mr. Sun manipulated the price of TRX using fake training accounts and noted she is willing to provide evidence and testify in support of these allegations. Chairman Atkins, you have said that under your leadership, the SEC will focus on real fraud. Yes or no, does your statement extend to fraud in the crypto markets?

Yes. I'm sorry, yes, whatever involves securities.

Okay. Is the SEC going to continue to prosecute its fraud against Justin Sun? Yes or no?

Well, I can't discuss anything about an ongoing matter.

Okay. Well, will you commit to giving the committee a confidential briefing on the matter?

Happy to talk to the extent I can about matters, but—

Given that courts have ruled that TRX is a security and therefore within the SEC's jurisdiction, do you agree that the SEC has a responsibility to obtain additional evidence offered by Mr. Sun's ex-girlfriend? Yes or no?

Well, again, I can't comment on any ongoing matter.

Will you commit today that the SEC will continue to investigate and prosecute fraud even if that fraud entails crypto assets that are securities, such as in the case of Justin Sun and TRX?

Again, we are—that's our job is to investigate fraud that, you know, involves securities. So wherever it may be.

Well, I want to tell you, you made a commitment. You came in, you talked about you were going to deal with fraud. It's right before your eyes. And you—we all on this committee are going to keep on until we get to the bottom of this fraud. So will you give us a confidential briefing on this matter?

To the extent the rules allow me to do that. So yes, but—

I would appreciate that, and thank you very much. I yield back.

Gentlewoman yields back. Chair recognizes the gentleman from Michigan, the vice chairman of the Financial Services Committee, Mr. Huizenga. You're recognized for five minutes.

Thank you, Mr. Chairman, and good to see you again, Mr. Atkins. Appreciate your time here. I got a lot to cover here, so—but you've been vocal about your efforts to modernize and streamline shareholder disclosure. Amen, hallelujah. Over the past 20 years, it's become easier for investors to access and view fund disclosures electronically. E-delivery makes sense. It's seamless and convenient, saves money, reduces waste, and reflects investor preferences. SEC action on this subject would bring fund disclosures in line with similar e-delivery changes that have been made by the IRS and FINRA just this year, the Department of Labor in 2020, the Social Security Administration in 2016, and the Federal Retirement System known as the Federal Thrift Savings Plan, the TSP, did that in 2003, over 20 years ago. So we are subject to that, actually. So does the Commission plan to engage in rulemaking related to e-delivery?

Yes, we are actively looking at all of that.

I well, I'd be remiss if I didn't mention that Congress has now moved my bipartisan e-delivery bill, Improving Disclosure for Investors Act, twice now through the House, and there is broad support for this issue. So I'd encourage you to continue on with it.

I've instructed the staff to work on that.

Well, thank you. All right. Moving on to another favorite subject of mine, the PCAOB, the Public Company Accounting Oversight Board. As you know, I've advocated for years that the PCAOB should be folded into the SEC. Given the politicization of the board over the years, I think this makes sense. Under the Biden administration, the PCAOB issued prescriptive rules that imposed high compliance costs while its budget increased at a rate significantly faster than that of your own SEC, with annual salaries of board members exceeding half a million dollars. I was glad to see that the SEC recently approved the PCAOB's budget totaling $362.1 million, which is a 9.4 percent decrease from the prior year, including a 52 percent and a 42 percent reduction in the chairman's and the other board members' compensation respectively. I know that a new board has been recently appointed. What plans do you have that will further streamline the PCAOB?

Well, so thank you for that. I yesterday actually I swore in the new chairman and new members of the board. So looking forward to their work. They are well-steeped in, you know, the, you know, what it takes and should take to do audits and oversee that. So I really I have a lot of confidence in them. So we will be working with them to and very closely to to work on that.

Great. Well, I look forward to hearing more about the plans how to streamline that. I've got about two minutes left. I want to briefly touch on the SEC climate disclosure rule as oversight chairman— ...last Congress I spent a considerable amount of time trying to understand how and why the SEC finalized this overreaching rule. There was litigation, then the rule was voluntarily paused by Chairman Gensler. Then acting Chair Uyeda, under him, the board voted to end defense of the rule and really frankly this has become a mess. So because of the oversight work of our committee did in Congress, we were able to prove that the SEC not only lacked expertise, their own admission, but the authority to issue climate disclosure requirements for publicly traded companies. You cited materiality earlier. Chair Atkins, can you update the committee on the status of the rule and where the SEC plans to go next with it?

Well thank you. The rule is stayed, you're right, and it's before the Eighth Circuit and so the circuit has sent us a couple letters and so we are actively considering our next steps. So but you know let's suffice it to say that we'll be guided by materiality as a standard of you know how we approach this issue.

Okay I'd like to explore that more maybe at another time. Finally in the last administration the SEC and the CFTC fined dozens of firms more than a billion dollars for failure to keep records of off-channel communications. Let me remind you last year it came to light that the SEC's IT department had supposedly inadvertently deleted a large swath of former SEC Chair Gary Gensler's text messages. Oops. So do you have plans to propose updated common sense record keeping rules that would give firms clear and reasonable guidance with what records they need to keep?

Yeah we are definitely working on that. I've instructed the staff to do that. The crazy quilt of different standards for different types of market participants that like broker dealers, advisors...

Gentleman's time has expired.

...credit rating agencies. So we're working on that. Thank you.

And I will have one more question in writing to submit. I yield back.

Gentleman yields back. Gentlewoman from New York is recognized, Ms. Velázquez, who is the ranking member of the House Small Business Committee.

Thank you Mr. Chairman. Chair Atkins, I would like to follow up on the ranking member Waters' line of questioning. Since becoming Chair, the Commission has pulled back from a remarkable 61 percent of the cases against the crypto industry. Do all these cases have the same legal or evidentiary deficiencies?

Well thank you. Most of those were withdrawn or changed before I arrived in last April. But I can say that you know what we're trying to do is realign to what the statute hopefully will be the market structure statute and the outlines that I've given in a couple of speeches regarding you know how we view the taxonomy and the structure on crypto.

So I bring this up because of the 23 cases the SEC inherited, 21 from the Biden administration and two from the first Trump administration, there has not been a noticeable change in the facts of these cases to warrant the SEC's decision to pull back from these cases. Do you know what many of these cases do have in common?

Well depending on which ones you're talking about, most of them from my memory have to do with registration Section 5 under the '33 Act and actually the SEC has a rather mixed record in court regarding those.

Okay so according to the New York Times, the defendant in most of these cases have close ties to President Trump. Mr. Chairman, I ask unanimous consent to submit this article into the record.

Without objection it will be included.

So you're telling us the SEC decision to drop or pull back from most of the crypto cases the SEC inherited have nothing to do with the $1.2 billion that the President and his family have made from the crypto industry since taking office?

Well again I wasn't involved in many, it depends on which ones you're talking about of those decisions, but I can't imagine that my colleagues would have been swayed by that.

Well Mr. Atkins, you yourself are reported to have close ties to the crypto industry holding approximately $6 million in crypto related assets prior to being sworn in. So you are also telling us that your $6 million in crypto related assets has nothing to do with the SEC decision to pull back from this enforcement. Mr. Chairman, I yield back.

Gentlewoman yields back. Chair recognizes the gentleman from Oklahoma, the Chair of our Monetary Policy Task Force, Mr. Lucas, you're recognized for five minutes.

Thank you Mr. Chairman and thank you Chairman Atkins for being here today. Under your leadership the SEC has approved two more clearinghouses, two more clearing agencies I should say, to offer Treasury clearing. This is a welcome development and certainly a positive step as we move toward full implementation of Treasury clearing rule. And I appreciate the update from Commissioner Uyeda earlier this week as this is an immense undertaking for the industry and should warrant robust transparency. Is the SEC incorporating feedback from market participants and what still needs to be addressed to ensure there are no disruptions to the Treasury market at the end of this year?

Well thank you. That's a very important issue, the Treasury clearing process and changes to that very important market. So yes we're working closely with Treasury and with the industry to make sure that as this goes forward that there won't be any hiccups in it and to make sure it goes smoothly.

And on that same thought Mr. Chairman, I was also pleased to see that the SEC requested comments on a proposed change to extend an existing cross-margining agreement to end users in order to reduce cost and make clearing more efficient. Can we expect a resolution to the proposal well before the clearing rule is live? Market participants need sufficient runway to execute those changes.

Amen. I think you know we want to make sure that things go smoothly, that there are no hiccups there with it and that people have plenty of notice and ability to gear up for those changes.

And I know it almost goes without saying but I hope you'll work closely with the banking regulators to ensure capital rules recognize the risk reducing benefits of netting across products.

Yeah that's important for the for the market itself and to be efficient with capital.

Chairman Atkins, for decades public school teachers and charity workers have been barred from accessing many low cost investments that their private sector 401(k) counterparts can use. Given your commitment to modernizing our capital markets, do you agree that we should no longer deny nonprofit employees access to these cost effective vehicles?

I it sounds like a you know something that needs to be done.

And my bill HR 1013, which was introduced included I should say in the INVEST Act, finally amends federal securities laws and provides parity for 403(b) plans. Turning to the crypto task force. I understand you've contemplated an innovation exemption for tokenized equities. Our current capital markets are the envy of the world and of course must be safeguarded. Will you ensure that the Commission seeks broad and diverse stakeholder input through the notice and commitment process to mitigate unintended consequences of potential exemptions?

Yes so notice and comment is important but the innovation exemption that I've been talking about would be you know cabined, time limited, transparent and really anchored in strong investor protections. So we would police that you know carefully and it's like a sandbox but not picking winners and losers.

Thank you for your responses Chairman and I look forward to a productive coming months. With that I yield back Mr. Chairman.

Gentleman yields back. Chair recognizes the ranking member of our Capital Markets Subcommittee, Mr. Sherman of California, you're recognized for five minutes.

Ah Mr. Chairman, you show us how long these statements can be. I haven't read the whole thing but I'll point out that the analysts do and that the market price that that security trades reflects the opinions of dozens of analysts who have read the whole thing and that assures a fair price for buyers and sellers and we need as much disclosure as possible including quarterly reports. You mention materiality. Materiality as you quote the court is what a reasonable investor thinks is important. And there is an effort by some even in this committee but certainly in Washington to brand as crazy or unreasonable the millions of investors around this world who look at climate as material. They want to know, they want to base their investment decisions on the effect that the company has on climate and I would say that your duty to provide information to investors is just as great with regard to climate investors as investors who are looking at something else. We talk about you mentioned in your opening statement some $2.7 billion in costs. I'll point out that in 2024 there were $8.2 billion in fines levied and that's just the tip of the iceberg your predecessor because not only do you have that recovery but think of all of the shenanigans that are deterred for everyone that is every fraudster who's apprehended. Mr. Chairman, I want to thank you for your time speaking about some of these issues yesterday. Would two Democratic commissioners for the SEC make the SEC better?

Well I leave that to the President and the Senate to send commissioners but you know I've been now at the SEC for in and out for 35 years and I've seen how it's worked and it works well with with five commissioners but I've seen it with when Arthur Levitt and Steve Wallman were commissioners and that was you know two. And so I mean it's so the work gets done but it's good to have a lot of input and so I would be happy to work with whomever the President sends our way.

Thank you. There are some great bills that have passed this committee, sometimes repeatedly. But unfortunately we have a United States Senate. Fortunately we have a Commission that could do all these things without us legislating. Mr. Huizenga points out that the e-delivery bill is meritorious and something that you can adopt by rule. And I will also focus your attention as I did yesterday on the BDC bill which is of course part of the INVEST Act and free standing legislation that would finally allow BDCs as a practical matter to be included in indexes. The next issue is the registered mortgage backed securities, that is to say mortgages in pools where the mortgages have not been guaranteed by Fannie or Freddie. Since the SEC adopted Regulation AB II, not a single one of these pools has been out there because this regulation requires 270 data points about every loan so if you have a thousand loans in the pool that's 270,000 data points and I suggest a document even longer than the one sitting near your left hand. Can you will you take a look at this regulation and give us a regulation where we can have registered mortgage backed securities that are not guaranteed by Fannie and Freddie?

Ah yes sir. That's high on our list and that's a crying shame that's the state of the market.

I'd like to turn your attention to data protection. David Scott has an excellent bill that I've joined with him as have others dealing with SEC data the SEC Data Protection Act and I wonder if you will take a look at that bill, take a look at the data security at the SEC and come up with a program that reflects the need to keep the data secure.

That is a big priority after we've seen what the mishaps that have happened in the past.

I yield back.

Gentleman yields back. Chair recognizes the distinguished gentleman from Texas, Mr. Sessions, you're recognized for five minutes.

Mr. Chairman, thank you very much. Chairman, welcome to the Financial Services Committee. We're delighted that you're here. I'm sure when you walked in this morning I as you know I saw you in line waiting out in the cold. Today we are in the middle of a memorial service for a former colleague Doug LaMalfa, a Congressman of our friend who passed away from California so normally this body would be full waiting to to speak with you so I simply offer a bit of information. Chairman, I saw you outside and had a chance to engage you. You're aware that your crack staff learned last night that I would be here and have several questions and I'd like to refer to those as an overall SEC actions and inaction. Some things that you agreed to take on by virtue of the job and things that responsibility that you have agreed to take on now. And I note in looking at your background in 1983 you were senior student writing editor of the Vanderbilt Law Review and I consider that very favorable because you too recognized as a student you wrote much. You expressed your opinion but it was essentially providing to someone else information that you agreed with. I think we find ourselves as members of Congress as as writing students also many times to agencies of the federal government. We write a lot of letters and we wait and sometimes hear things back. I want to say that I have found your responsiveness, your breath of fresh air is helping I hope on a bipartisan basis but I know for myself to address issues that are still actions and inactions that the SEC has taken up over the last few years. I would say to you I am interested in also your work and really wish to compliment you because of the things that you have taken on including what might be called your regulatory flexibility agenda which I enjoyed which you released in September and intend to do this year to offer flexibility reminding us as you did that you are for making sure that growth and investment opportunities happen to investors around this country that would be proactive and also reactive to help us. I would like to tell you that we held under Ann Wagner, Chairman Ann Wagner, a hearing that discussed from an IPO perspective that has been spoken a little bit about today but I come at this as co-chairman of the Biotech Caucus. Biotech is the future energy that America stands a leg up on and supporting against our adversaries around the world. Who will develop the next great not just biomarker but biotech breakthrough to supply the free world with a better opportunity? And in relation to this we found out in testimony that I believe your staff has been provided that the testimony was up to 50 percent of IPO dollars went simply to compliance. And I think you spoke well about this not just your knowledge base about trying to reduce regulatory costs but the knowledge that this competes against America's best interest to be competitive with world markets with other people who do not have the same rules and regulations we do. At no point would I back you away from or caution you not to go to what's in the best interest of the investor who could find themselves in a market like that of not knowing the truth about what's next. But I would say to you that I provided your staff last night with several very specific items. You were very magnanimous today in line and said without calling me by name, you would make sure that this agency picks up the pace and does intend to not only follow the items that we talked about but become more transparent in the relationship with members and the marketplace and I want to applaud you. I felt that you standing in the cold was a good time to engage you and it worked. Mr. Chairman, I would yield back my time in thoughtful consideration to the staff and our new young chairman for his role and work. Thank you.

Chairman yields back. Chair recognizes the distinguished gentleman from New York, Mr. Meeks, the ranking member of the House Foreign Affairs Committee, for five minutes.

Thank you Mr. Chairman and what I'd like to say first, you know look, I look at across our country and I see hardworking families invest in the stock market to build a future. These are not day traders or large market players. They are teachers, firefighters and nurses saving through mutual funds, pensions, retirement plans like 401(k)s, IRAs. These everyday Americans, they rely on strong, fair and accessible markets. We work for them. I was pleased in fact to co-lead the INVEST Act late last year with Chairman Hill, Chairwoman Wagner, Congressman Gottheimer and I was even pleased more when the House passed the bill with a strong bipartisan vote signaling that both Democrats and Republicans support modernizing rules to empower small businesses and everyday people. We did our job here but I also believe in that we have to work for those American people. We've got to make sure that they are protected and that their investments are as sound as we can do it. So Mr. Atkins, my question to you would be as a successful person in the financial industry, would you ever recommend that someone take financial advice from their let's say their favorite celebrity?

From a celebrity is that what you said or? Yeah well I think...

I mean yes or no. Would you just tell somebody they should just take financial advice from a celebrity?

You should check out the background of the person yeah.

Because you would not ever and you have not ever taken financial advice from your a favorite celebrity that you may have had. That's correct? I would assume.

Well it depends if I mean Warren Buffett's a celebrity but anyway but...

And the reason I bring that up is this. Back in 2022 when the SEC brought enforcement action against a celebrity TV star, at that time it was Kim Kardashian, the SEC warned investors to use caution with celebrity endorsements of investment products. Just because it's being promoted by a well-known figure doesn't mean it suits every investor's risk tolerance or financial goals. I happen to think that's absolutely correct. But we also have a similar situation today. Just a few weeks ago, five Trump affiliated exchange traded funds under the name Truth Social America First ETFs were launched. It is meant to attract Trump fans who align with a patriotic America First agenda. Now I'm not sure what that means for the investment product but most of these investors seem to be drawn to the product because of the Trump name rather than understanding of the investment product. Seems to me that was just like Kim Kardashian and we do have happen to have before he was elected still a TV reality star now sitting in the White House. So my question to you Mr. Atkins is how is the SEC evaluating investor protection risks when a financial product is tied to a high profile political figure or celebrity, particularly when retail investors may be drawn in by name recognition or perceived trust rather than a real understanding of the product's risks and especially when that figure happens to be the President of the United States of America?

Well I there's our rules are geared towards disclosure of material information and so and the risks there in and so without speaking to any particular type of product, you know that's the really essential thing that investors need to look at and again that's why we need to have good tailored disclosure that's material and not obfuscate there's a lot to obfuscate.

So I agree but so what I want to do I got you know 42 seconds. I just want to know will you commit to providing this committee in writing a clear description of the SEC's internal process for handling, evaluating and approving decisions on the Trump affiliated ETFs so we can confirm that the process was independent and focused on investor protection and free from pressure and influence from the White House? Because we are here for the American people, not to do the workings of the White House. We want to make sure that's free and clear of that. Can we get your commitment to do that?

Well we're happy I without any particular investment, I'm happy to provide you with our procedures of how we review filings and for these types of things.

Gentleman's time has expired. Thank you feel free to expand on that in written answers to the gentleman's question. Chair recognizes the gentleman from Texas, Mr. Williams, who is the Chair of the House Small Business Committee.

Thank you Mr. Chairman and thank you for being here today. Appreciate it. Well a number of proposals affecting registered funds and advisors from the prior administration were not ultimately adopted and have since been removed from the rulemaking agenda. The SEC did finalize several fund related rulemakings in recent years that have a significant operational and compliance implication. One example is the 2023 amendment to the fund names rule. Chairman Atkins, in cases like this, how is the Commission evaluating whether recently adopted rulemakings are operating as intended and what tools does the SEC have to address aspects of those rules that may lead to unintended consequences for funds or investors?

Well thank you for that question very much. You know I've asked my division directors to and their staffs to review rules. I think it's good to have a retrospective review to see exactly how things are are working. We also get lots of suggestions and comments from the industry and from investors so the names rule is just one of one example of all that.

Now for many small and medium sized businesses, I'm a small business owner in Texas myself, the regulatory regime put in place by past administrations was too far burdensome and prevented them from taking necessary steps to access public markets. These businesses also face roadblocks when attempting to access private markets as there were too many rules regulating who can invest in private markets. So many businesses were left with very few options to raise the necessary capital to continue to expand their operations. Now when regulatory frameworks make it uneconomical for small and mid-sized companies to enter public markets and overly restrict who can participate in private markets, capital does not become safer, it becomes scarcer. So my question is can you elaborate on how the SEC's renewed focus on facilitating capital formation is helping ensure that small and mid-sized businesses, Main Street America, are not priced out of public markets or boxed out of private capital altogether?

Well that's a very important issue. Thank you very much for raising that. But again you know one of my main focuses now is to make IPOs great again and to do that is to help cut down on the burden that of of disclosure that is not material. Second is the litigation issues if we can help ameliorate that and third is the third impediment is basically corporate governance weaponization. So those sorts of things help to you know keep people out of the public markets or make it unattractive and with respect to smaller businesses, we need to make sure that our rules are fit for purpose that can encourage them. There are various provisions of the regs that we have that are meant to try to help small businesses have better access to it and so that is a big effort that we will be doing over the next couple years to to make sure that that is encouraging them and helping them to tap those markets for capital.

Well small business has great opportunities this year to grow and take advantage of some things so. Lastly entrepreneurs continue to face a challenging environment when it comes to securing growth capital driven in part by rising regulatory compliance costs but also the concentration of investment activity in a handful of major financial hubs. Now for many businesses operating outside these traditional hubs, accessing capital can present different structural challenges. These dynamics often constrain growth and limit economic development in communities that rely on entrepreneurial investment. So my last question would be Chairman, how do capital formation challenges differ for businesses located outside of traditional financial hubs and how can the SEC help ensure capital markets survive Main Street as effectively as Wall Street?

Well again another important issue and so in your state for example, I mean there's a lot more efforts I think for new entrants into financial services outside of the big money centers, New York and and elsewhere. So for example the new Texas Stock Exchange there and then also the New York Stock Exchange and Nasdaq are moving operations to Dallas so I think all of those sorts of examples you know will help democratize access to the markets and in different regions of the United States.

So what you're saying is Texas is the greatest state in America. There you go. Thank you for that. I yield my time back.

Gentleman is from Massachusetts is recognized, Mr. Lynch, who is the ranking member of our Digital Assets, Financial Technology and Artificial Intelligence Subcommittee.

Thank you Mr. Chairman. Mr. Atkins... I want to talk about Binance. So Binance, which is a major crypto exchange, was charged and pled guilty to providing finances to, among a number of groups, Hamas, ISIS, Al-Qaeda, Islamic Jihad, Hezbollah, the Islamic Revolutionary Guard in Iran, a bunch of sanctioned people in North Korea, and assorted criminal networks involving sexual, child sexual abuse. The SEC dismissed that case two months after you arrived. But it gets worse. Two more months after you had arrived, after that case was dropped, President Donald Trump gave an unconditional pardon to Changpeng Zhao, who was the CEO of that company. He did receive a four-month prison sentence, but the record of his conviction was pardoned. The company did pay a $4 billion fine, or we think they've paid most of the $4 billion fine. And then in May of 2025, after you were on board at the SEC, an Abu Dhabi state-backed investment firm, MXG, announced that they had just purchased $2 billion in World Liberty Financial crypto from Trump's family. This is Eric and Donald Jr. and Barron and Steve Witkoff's son. So the president's company got a huge, huge benefit, massive benefit by being in that $2 billion transaction. They bought Trump Coin and they invested it in Binance, Changpeng Zhao's company. So you're the cop on the beat. Explain to me how this happens without any enforcement action. Matter of fact, enforcement actions since Trump took office and you became SEC chair, they are now down 60 percent. Statutorily, your responsibility, number one responsibility is to protect consumers and to maintain trust in our securities industry. How does what you are doing protect the consumer? How does letting these crooks, letting them off, not prosecuting them, letting Trump's family do all this, explain yourself. I just, it boggles my mind that this is going on and there's no consequences to what the president's doing.

Well, Mr. Congressman, I, you know, I can't speak to any one particular case and so...

You've got to be kidding me. I give you, that's a target-rich environment. Start anywhere you want, but let's, this is all public, so you're not disclosing any secrets here. We all know what's going on. The one question that's out there is why aren't you doing anything about it? Why are you letting him, look, this is hurting the crypto industry. All these scams, I mean, look at crypto today. I think it's down 25 percent in the last month. People are losing trust in that. This is not good for crypto. It's certainly not good for consumers. And it's awful, the reputational damage that the SEC is suffering right now is unbelievable. And you're in the seat, sir. It's your responsibility and I'm just asking for an explanation.

We have a very robust enforcement effort and we are bringing cases in fraud...

It's down 60 percent. I don't know where you get that. Let me give you a list of the cases you've dropped. You've dropped them against not only Binance, but Robinhood. There's a whole list of them here that, it's like 10 major cases that you've dropped.

Gentleman's time has expired. Gentleman's time has expired. The gentleman from Georgia, Mr. Loudermilk, you're recognized, the vice chairman of our House Subcommittee on Financial Institutions.

Thank you, Mr. Chairman. Chairman Atkins, thank you for being here with us. I've been looking forward to this testimony for quite some time because I have for years been working on doing something about the consolidated audit trail, and that's where my questions are going to be around. Let me preface that with my concerns of the consolidated audit trail is first and foremost unconstitutional in the way that it's being operated, especially requiring the reporting of PII information. At one point, I asked my local banker a question. I asked him, I said, what if the sheriff walks in and he asks you to provide him all of my financial transactions over a certain period? What would you do? He said, well, I would ask to see a court-issued search warrant before I gave it to him. So I went to a local judge and I asked the judge, I said, what if the sheriff came to you and he was asking for all of my financial records to be turned over? What would your response to the sheriff be before you issued a warrant? He said, I would need to see cause, right? He would have to prove to me that there is justifiable cause for this. My problem with the consolidated audit trail is it's forcing this information to be put into a centralized database without cause, without reason. Your predecessor sat in that seat right there and I asked him, what is the purpose of this consolidated audit trail that you are taking an individual who maybe buys a quarter share of Apple stock through Robinhood or one of the other platforms and his entire information is having to be put in this database, which besides the cybersecurity risk, is unconstitutional? He said, so we can peruse the database looking for something that potentially is being done wrong. And I said, sir, that is exactly a definition of violation of Fourth Amendment of the Constitution. So with that said, this is something I think that we must address. And Chairman, you announced in September of last year the SEC was undertaking a comprehensive review of the consolidated audit trail. Can you comment on that and what you are finding?

Yeah, well, so that's active, that's an active matter and we are definitely looking into that and working with various stakeholders in the industry to try to get this whole situation under control. Basically, it's suffered from a lack of, let's say, just a good view ab initio when it was started 15 or 16 years ago, whatever it was. And it's grown like topsy as far as how much it's cost and so we are out to get that under control, make so that it is gathering information that comports with the Constitution.

Well, I appreciate you looking at it. And I also appreciate under your leadership the commission has sought to cut wasteful spending. And the consolidated audit trail's cost overruns have deeply concerned me and many of my colleagues in Congress. What was originally supposed to cost $55 million has ballooned to nearly a quarter of a billion in just eight years. The issue, especially given that the consolidated audit trail's funding model was also found to be unlawful by the 11th Circuit Court of Appeals. Last week, I joined Chairman Hill and Subcommittee Chair Wagner in a letter urging the commission to defer the approval of any new funding model until after the comprehensive review of the CAT is complete, and I look forward to seeing those results. Mr. Chairman, can you please explain how the SEC's comprehensive review of the CAT aims to help right-size the cost?

Well, we, I called the heads of all the members of the CAT committee basically that runs it to say that, you know, I'm not joking, that we need to have this right-sized with a goal of getting it under $100 million and then justify all the information that we're collecting. And so I've been working with the people internally at the SEC and our enforcement staff, investigation staff as well. So you know, there are some things that you know have gone away as far as like blue sheets and whatnot information that comes that way. So we want to make sure that whatever is replacing blue sheets in CAT is not what it is now, makes sense and is efficient, but then also comports with all the points that you just raised.

Well, thank you. And I think the stopping the collecting of PII and deleting that that we have will be a priority and look forward to working.

Gentleman's time has expired. Thank the gentleman. Chair recognizes the gentleman from Texas, Mr. Green, who is our ranking member of our Oversight and Investigation Subcommittee. You're recognized for five minutes.

Thank you, Mr. Chairman. Thank the ranking member as well. Also thank Mr. Atkins for being here today. Mr. Atkins, sir, are you familiar with Trump Media & Technology Group?

I've heard of the name, but I don't know much about it.

You've heard the name. Okay. It's a stock. It's on the stock market.

I believe so, yes.

Yeah. And the ticker symbol for it is DJT. Would you be surprised if it had a ticker symbol of DJT?

No, I mean, there are ticker symbols on all sorts of things.

Would it surprise you if that's the symbol?

Not necessarily.

So you don't know what the symbol is for it. Well, let me tell you, it's DJT. And are you familiar with what happened on April the 2nd, 2025, when the president announced his Liberation Day tariffs?

He made that announcement, he did.

Yeah. And do you remember what happened in the market? Would it surprise you to know that the market declined some $11 trillion that day?

The market was very volatile around that time.

Yeah, $11 trillion is very volatile. And would you agree that later on the president paused that announcement that he made on Liberation Day? In fact, he did it some few days later. Do you recall that? That he paused it?

I don't recall all the, you are the head of some organization that has something to do with these kinds of things, aren't you, sir? Well, luckily we don't deal with tariffs. That's outside the realm.

I understand, but you are widely read, aren't you?

I try to keep up with things, yes. I don't recall all the ins and outs of that time.

Okay, well, so if I told you that the market saw this decline and that the president then, before the decline, he posted on Truth Social. Do you know that the president is a owner of Truth Social? He has a large share of that.

Yes, I know he's involved with it, yes.

He does, yes, sir, he does. And here's what he posted: "This is a great time to buy DJT." Would you agree that the president's initials are DJT?

Yes.

Okay, good. And so now we have DJT, the ticker symbol for his technology group that he owns a majority of the shares in, and also his initials. So he says it's a great time to buy DJT. Maybe what I'm doing now is informing you and perhaps you'll want to take some corrective action. But he says it's a great time to buy DJT. You wouldn't be aware of this, I'm sure, but DJT surged $415 million that day. Does that, have you heard about that? That it surged?

I don't know all the specifics.

Don't know all this. It's all very complicated stuff, isn't it? The kind of stuff that, you know, a person in your position wouldn't have heard of or know anything about.

There's a lot of activity in the marketplace.

Yes, sir. This is the president of the United States of America. All right, now that you know, President hustled $415 million for a business that he has a majority of the shares in, and he, some people would call that market manipulation. But do you think that it merits some degree of investigation? Would you look into it?

Well, you know, I...

If what I've said is true, would you look into it?

The, our...

I'm a whistleblower.

Well, so we get lots of whistleblowers.

Well, I blow loudly. Would you, I've just informed you on TV, the world's going to know that you now know that the president made $415 million on a stock that he advised people to buy just before he manipulated the market and caused this surge in the market. So now you know. Mr. Chairman, we live in a world where it's not enough for things to be right, they must also look right. If for no other reason, the appearance of this is something that we ought to be concerned with. Now you're the chair. Would you look into it?

You know, I, again, I can't confirm or deny anything as far as investigations.

I understand, but I would advise you to look into it. Thank you, sir.

Gentleman's time has expired. Members are reminded that pursuant to House Rule 17, they should avoid engaging in personalities when speaking about the president. It can always be about policy, but it cannot be personal. Chair recognizes the gentleman from Wisconsin, Mr. Steil, who is the chair of the Digital Assets, Financial Technology, and AI Subcommittee.

Thank you very much, Chairman. Chairman Atkins, thanks for being here, thanks for your service to the country. The United States has the greatest capital markets in the world, and in large part it's the oversight and regulations that are provided by the SEC to make sure we guide that to success. I want to touch base in particular on your MOU with the CFTC. The House passed the Clarity Act to really provide a framework for regulation in the digital asset space to do two really important things in my view: one, protect consumers, and two, make sure that the United States is the domicile to be able to outcompete the rest of the globe. You engaged in an MOU with the CFTC. Sometimes we've seen the SEC and the CFTC not play well together. I think we're seeing a change under your leadership at the SEC. Could you provide a little additional clarity, for a pun, if you on the term clarity, but a little more clarity on what this MOU is, how it's working, and how you're operating with the CFTC in particular as it relates to the digital asset space?

Oh, thank you very much. That's really near and dear to my heart, so I'm really thrilled that the president appointed Mike Selig to be chairman, so he came from my office and obviously was chief counsel or counsel for the crypto task force. So he's well-positioned to do what he's doing there at the CFTC. So our intent is to harmonize the activities of the two agencies, particularly with respect to digital assets. And that's why, you know, we're hoping for a good statute to be enacted from all the discussions here in Congress. As far as the actual working together of the agencies, we are actively working on an MOU. It's kind of silly to think that two groups that are serving the taxpayer have to have an MOU as between them to work together, but be that as it may, we're out to get that.

Well, I appreciate your leadership in this because making sure the CFTC and the SEC are working well together, not only at the principal level, at your level, but also through the staff is really important. Let's dive into an area of specific, which is token taxonomy. We've put forward frameworks on this in the House. I know the SEC is engaged in this. There's obviously overlap with the CFTC. Could you provide clarity as to where you are on that work?

Yes, so I've outlined how I believe that the two agencies will march ahead to bring clarity to this area. It'll be consistent with what's in the Clarity Act that you all passed here in the House and hopefully what will come out of the joint work that you're doing with the Senate. So you know, we will carry that forward and basically it'll help give certainty as to where the jurisdiction of the two agencies are. And if we marry that with super, I like to talk about a super app where we'll have recognition of substituted compliance between the two agencies. I think that'll be the best.

Thank you. In my final two minutes here, let me shift gears to the proxy advisor duopoly. ISS and Glass Lewis dominate in this space. I've introduced legislation to regulate, to change the rules of the road for proxy advisors. I am concerned about conflicts of interest, ideological bias, a lack of transparency. We have an opportunity to fix that from a legislative standpoint, I think that's really important. While we're working through that process, what can you at the SEC be doing to address this concern? And do you share my concern on the risks posed to the capital markets by this duopoly?

Oh, absolutely. And you know, anytime you have a concentrated industry, that's not necessarily good for the consumer of those products. But especially in this, as I alluded to previously, the situation with those two firms is more of a symptom of the underlying problem, and that's again the weaponization of shareholder proposals and that sort of thing.

I agree with you on that, but I also think that there's a real conflict of interest between the ability to provide consulting services on one side of a so-called Chinese wall and then to be able to provide advisory on the other side. Do you think that those potential or real conflicts of interest should be disclosed for the capital markets to operate efficiently?

Well, they not only should be disclosed, but obviously they need to be addressed. And so I think that's an issue that we definitely are concerned with.

I agree. Appreciate your work in this area. Mr. Chairman, yield back.

Gentleman yields back. Chair recognizes the gentleman from Missouri, Mr. Cleaver, who is the ranking member of our Housing and Insurance Subcommittee.

Thank you, Mr. Chairman. Mr. Atkins, thank you for being here today. We on this committee often talk about investor confidence, kind of like an abstract concept, but for millions of everyday Americans trying to buy a home, it translates directly into whether they can get a mortgage at a reasonable rate. I was on that second row down almost at the end in 2008 when your predecessor, Chris Cox, Hank Paulson, Ben Bernanke, Sheila Bair came in to tell us what was happening with the economy. It was one of the worst days in my life to sit here and hear what was going on and realizing that this committee had to address it. Investors, as you know, lost trust, markets collapsed, and a lot of ordinary everyday Americans paid the price. And credit didn't just tighten, like the chilly waters around Greenland, they froze. And Congress and regulators, including the SEC, worked to restore that trust through a lot of measures, including the skin in the game risk retention rules and disclosure requirements for asset-backed securities. These rules were put in place to prevent securitizing or securitizers from passing off low-quality assets to unsuspecting investors. Now, you've recently indicated an interest in rolling back or revising some of these regulations. My uncle, you don't know him, Uncle Leroy, my father's oldest brother, had a company and he did maintenance. And he went to T.A. Loving and Son company, he was working with the CEO on this contract. And the CEO said, "Now, if I give you this contract, will you be honest?" And my uncle said, I'll never forget it, "Whether you give me this contract or not, I'm going to be honest." And so before making any revisions, will you commit publicly that you will present to this committee those rollbacks that you've hinted that you want to do? I admit transparency makes us vulnerable, but transparency still should be done even if it's going to make us vulnerable. Will you commit to coming to this committee or informing this committee or discussing with this committee what your rollbacks will be?

Well, I'm not sure that we'll have rollbacks, but I mean, as Mr. Sherman was talking about, the whole one part of the market has really frozen up because of, but if that's what you're talking about. But anyway, but Fannie Mae and Freddie Mac play an important role in the housing market, but as we saw in the financial crisis, you know, they were a large reason for how that unfolded. So whatever we do, we have to be very careful with respect to these markets, but they are important in the whole economy of the United States. But happy to discuss that with you and your colleagues as we go forth and formulate our proposals.

Well, if we're going to, I may be semantic here, but if we're going to, if you are going to rollback or make any dramatic changes, my question, my interest is the communication and transparency.

We definitely will go through notice and comment. I take that very extremely seriously, unlike sometimes in the past, but we want to have a good robust debate and collect comments. And so happy to talk with you all about all of that. But whatever we do will be grounded as we talk to our colleagues.

Gentleman's time has expired. Thank the gentleman. Chair recognizes the gentleman from Kentucky, Mr. Barr, who chairs our Financial Institutions Subcommittee.

Thank you, Mr. Chairman. Chairman Atkins, thanks for the great work you're doing at the commission. And as you know, for two consecutive Congresses, the House has passed and sent to the Senate digital asset market structure legislation, most recently known as the Clarity Act, receiving overwhelming bipartisan support in this chamber last July. That level of bipartisan agreement reflects a growing interest in providing long-term certainty for market participants. From your perspective, Mr. Chairman, how does durable digital asset market structure legislation like the Clarity Act impact the United States' ability to continue to lead in financial market innovation and protect investors?

Yeah, well, thank you very much. Well, as you know, the president has set out the challenge that the U.S. should be the crypto capital of the world. And I feel strongly that we can and should do that and achieve it. So to do that, we have to have a framework that makes sense, that is fit for purpose. Unfortunately, traditional rules that the SEC has are not really fit for purpose here and has created a lot of uncertainty in the marketplace, thus the Clarity Act and thus the true importance of the SEC to work very much hand in glove with the CFTC in order that there be no gaps in the oversight, but that also innovators have surety as to what they're doing and they're not going to get in a gotcha sort of situation like has happened in the past with some of the enforcement actions that the SEC has brought in that area. So we want to make sure that people know the rules of the road and can abide by it and that those will foster innovation here in the United States.

Well, I know there's a few outstanding issues and points of disagreement in the Senate. We certainly encourage resolution of those points of disagreement to achieve what you said is so important, kind of a statutory framework for market structure so that indeed the United States can be the crypto capital of the world. Mr. Chairman, how do you ensure that SEC enforcement actions and investigations are conducted and completed in as timely and an expedited manner as possible and make sure that those investigations are driven by clear statutory and evidentiary standards and not by political, ideological, or personal considerations? And the context of that question is that the SEC in the past has encouraged applicants for registration with the SEC to reapply after denials due to ongoing investigations. But if an investigation drags on and on and on, the applicant is effectively barred or precluded from reapplying. Mr. Chairman, the Dodd-Frank $150 million registration threshold for private fund advisors has remained stagnant, lacking an inflation adjuster. And this forces many small innovative funds to divert capital from emerging companies toward costly compliance. These funds often play a critical role in providing capital to emerging companies in niche markets that larger, more heavily regulated funds might overlook. My bill, the Small Business Investor Capital Access Act, was included in the INVEST Act, and that raises the registration threshold to $175 million, a very modest increase, but also indexes it to inflation. This will ensure that truly small enterprises aren't crushed by unnecessary federal mandates meant for larger firms. Chairman Atkins, do overly burdensome compliance requirements stifle the growth of smaller private funds, and would adjusting the exemption threshold for small private fund advisors to accurately reflect changes in inflation help alleviate this problem?

Absolutely, and I salute you for doing that. I mean, all of these things add up and it decreases competition and services to investors.

Great. Thanks so much. I yield back.

Gentleman yields back. Chair recognizes Mr. Dr. Foster of Illinois, who's the ranking member of our Financial Institutions Subcommittee.

Thank you, Mr. Chair and our witness. I presume that you've been encouraged to use artificial intelligence in all of your workings from the White House, it was a general directive and, you know, obviously industry is moving very fast that way. Now, in terms of the 1,000-page prop that you have there, you know, how long do you think it would take AI to summarize that as in one paragraph, you know, one page, 10 pages, whatever level of detail you wanted? You know, maybe a few seconds, I don't know, probably neither of us are an expert on that, but I imagine it could be done in a few minutes. And so in terms of a burden on investors, it seems like having a lot of information there is not a burden on investors in an AI world. And so I think that's an important thing that should go into your thinking as to what the appropriate level of disclosure. Materiality, I believe, is best in the the investor is the best judge of materiality. And if we err on the side of having a lot of, you know, probably 95 percent of what's in that stack of paper is not material, but there could be a footnote in there that is absolutely crucial. No human is likely to pick it up, as you point out, no human's going to read that stack of paper, but an AI can and find that footnote. And so it seems like, you know, the whole narrative of let's get to less disclosure is going in the wrong direction for an AI world. You know, I imagine that that stack of paper is probably 90 percent generated by AI, or soon will be if it's not. And so that I think that it's a much better position if we have, you know, the AIs, you know, for IPOs and things like that, generate a lot of information and then let the AIs of potential investors look at it in great detail. That you'll end up with a more efficient market and less mistakes being made by investors due to lack of information. So have you been thinking about that sort of thing when you puzzle through the whole what's the right level of information issue?

Absolutely, but but again, you know, there's the when you think of the cost and the amount of work that goes into this sort of disclosure with the lawyers and everything else, you know, what sort of bang for the buck are we getting? But anyway, and materiality—

But the cost of lawyers is going to get crushed too with AI. You know, I mean, most companies have everything electronically, they just turn their AI loose on that and generate, you know, it's coming at us fast.

Yeah, well, that's that's a good point.

Anyway, so I really encourage you to to think about that because I think that's going to be a much safer market where there's a lot of information and that each investor or the investor's personal AI advisor will have access to that information but summarize it. You know, just in the case of climate, a lot of investors are going to think climate's material, others will think it's immaterial, and it's we're in a better position if it is the potential investor talking to their AI advisor saying I do or I don't care about climate and then getting a summary that reflects their preferences. It seems like that gets us to a better place than just these endless wars we have about, you know, what is and isn't material at the level of Congress. Okay. Let's see, one of the things I've also been worried about is the orderly release of market-moving information by federal officials. You know, there and agencies, you know, there have been some big mistakes. There was an issue where I think the BLS issued or leaked some information, you know, like order of half an hour early to some lucky participants in the market. And it seems like for a long time we've needed a more orderly way of releasing that information that maybe, you know, could be government-wide so that when, you know, whether it's Federal Reserve releasing information or the BLS or something, that you had a standard electronic way of saying boom, here the gate is now open and that information's there. Because there's a lot of things that can go wrong. Is there any interagency discussion of that trying to standardize the release of market-moving information and maybe make it more robust?

No, that's that's an very important issue and it's a little bit ad hoc now. For example, the Food and Drug Administration, the director has come to talk to me about it and we, you know, so that's a great example. You mentioned some of the other agencies and the Fed and whatnot. So it's a very important issue and we have to, you know, each agency needs to be very—

Yeah, so if you need a nudge from this committee, I think this is a very useful nudge that we could do that would actually, you know, make the markets work better and make U.S. a better place to invest. A third area of concern that I don't have really a lot of time to go into is the use by federal officials of privately owned social media accounts to release market-moving information like tariff policy, things like that that move markets by trillions and effectively forcing every person in the market—

Gentleman's time has expired.

—to buy that—

Invite the witness to provide his comments on that last question in writing. Chair recognizes the gentlewoman from Missouri, the chair of our Capital Markets Subcommittee, Mrs. Wagner, for five minutes.

I thank you, Mr. Chairman. Chairman Atkins, your recent speech at the New York Stock Exchange detailed the stark drop in public companies and the need to reform our regulations to promote capital formation. Soon after that speech, the House passed our bipartisan INVEST Act to do just that. Now the SEC is working to revitalize public markets by right-sizing disclosures and rethinking investment thresholds. How important is it for Congress to follow up on the commission's work with statutory changes?

Well, I think absolutely, your INVEST Act and all of the components of it, I think are, you know, really will be salutary to the markets and to, you know, to help rationalize some of the practices there in our rules. And so we welcome that and, you know, look forward to working with you.

And it's key to codify them while we have the opportunity here. Many of these bills we've worked on for 10 years and there have been rulemakings by the SEC, but we need to get them into statute. You would agree?

I agree, to future-proof that sort of principle.

Thank you. You've repeatedly mentioned, Chair Atkins, the importance of creating a disclosure regime that promotes rather than hinders companies going public. The INVEST Act would streamline disclosure requirements, as I said, expanding access to capital for businesses throughout the entire country, not just on the coasts. In your opinion, how can Congress work with the commission to ensure these changes are most impactful?

Well, so I invite your input and as we, you know, go about reviewing our rules this year and making, you know, issuing proposals for rule changes to modernize and rationalize these disclosure rules, you know, I'd be thrilled to have, you know, you and your colleagues' input.

Wonderful. Early in your tenure as chairman, you gave a speech directing SEC staff to remove the 15 percent limitation on closed-end funds investing in private funds. The next day, investment management staff removed the SEC's position for unlisted closed-end funds. This was a welcome change for Americans across the country who will now be able to invest in companies that for far too long have been restricted solely to the wealthiest Americans. Through my Increasing Investor Opportunities Act, which was included in the INVEST Act, we have also taken steps to codify this guidance and provide long-term certainty to closed-end fund investors. To help provide clarity to investors, could you please comment on whether, in your view, the removal of the 15 percent limit also applies to listed closed-end funds or whether additional commission action would be needed to remove the limit for closed-end funds?

Well, so yeah, I love to discuss that. So the the reason why we addressed this is because that limit was completely staff-driven, it was not part of a rule or anything else. So by changing that, you know, that helped, you know, the the filers to and the innovators to to make changes to how they were how they were going out to market. So anyway, if there are holes in the edifice, so to speak, there, you know, we're happy to address all that and work with you on that.

Great. Wonderful. We look forward to doing that. So this is something that the SEC could take up under your leadership and discuss more?

Absolutely.

Wonderful. Under current SEC rules, it is nearly impossible for large venture capital funds to invest in smaller regional funds. For example, if a large fund wanted to seed a smaller fund in St. Louis, that investment is capped at a tiny 20 percent non-qualifying basket. As a result, access to venture capital remains highly concentrated on the coast, leaving out wide regions of the country, including Midwest. Chair Atkins, do you agree that this 20 percent limitation hurts companies in places like Missouri?

I'm not I'm not familiar with the actual impact on various regions, but—

But the 20 percent cap?

Yeah, so I think all of that needs to be revisited. These various caps are are kind of artificial and, you know, I think it all deserves review.

Absolutely. Thank you so much. I have used my time and I yield back, Mr. Chairman.

Gentlewoman yields back. Chair recognizes the gentleman from Illinois, Mr. Casten. You're recognized for five minutes.

Thank you, Mr. Chair. Thank you, Mr. Atkins, for being with us today. I I have some real concerns about the SEC dropping their dismissing their lawsuit against Binance and staying whatever you're doing with Justin Sun and TRON. I understand from your exchange with the ranking member and with Mr. Lynch that you're not going to comment on ongoing investigations, and I understand that. But and and I also appreciate the chair's admonition not to engage in personalities. But I am extremely concerned with what the integrity of U.S. capital markets. And so you know, I just want to review a fact pattern here. It is it is a fact that Donald Trump was convicted of 34 felonies for financial fraud. It is a fact that he and his children have said that in the wake of that fraud they were, in their words, de-banked and couldn't access conventional capital markets and that that was why they turned to crypto. It is a fact that the UAE subsequently purchased World Liberty Finance tokens through Bitcoin, that that now contributes to substantially all of their wealth, and that substantially all of the Trump family's wealth is now in crypto, much of all of that has come since he became president in January of last year. And setting aside the Emoluments Clause violations or implications there, if I am a foreign investor considering whether to invest in U.S. capital markets, I would like to know whether the SEC is going to prioritize the interest of investors because these charges against I mean, the charges against Sun, wash trading, money laundering, these are all deep structural problems in financial markets. When they look at the actions of your agency, they see multiple examples where you have not prioritized the interest of investors, but you have prioritized the interest of the Trump family. So my question is, can you point to an example under your leadership where you have put the interest of investors first and cost the Trump family money as a result? Just one example would be great.

Well, I as far as what the Trump family does or not, I, you know, I can't speak to that.

But but they've made billions of dollars as they pardoned CZ for goodness sake after the case was dropped, after this money went through. This is most of their net worth. Why should people not believe that you will prioritize their the interest of this singular billionaire over investor protection? Wash trades are a problem in the markets. Why aren't we prosecuting Justin Sun right now? And you can't answer that, but is there any example where you've put investors first over the Trump family?

We so again, we put investors first every single day.

Over the Trump family?

We have a very robust enforcement division that is going after fraud in the market.

Okay. If you can find an example, it would be great to share it offline and please publicize it because I care about markets. I want to shift. In November, the SEC announced you would no longer review or express views on companies' no-action requests, and I want to understand a little bit of what that means. I understand there's some discretion on your end, but have you are there any general rules or are we going to rely, you know, exclusively on shareholder litigation under 14 14a-8? If if a company if if shareholders came forward and said I've got a proposal because I have concerns about potential conflicts of interest, appearance of construction of corruption, reputational issues associated with management's business dealings, and management says I want I want a no-action review, is that a categorical no, or are you going to consider that on the merits?

Well, so the whole no-action process with respect to shareholder proposals was an artifice by the commission that built up over the years. There's nothing in rule or in statute there that requires it. We were shut down for 43 days, 43 nights, our—

No, no, I'm asking I want to come this I want to come back because I'm trying to give you an example for my first question. World Liberty Finance is trying to do this shell with BitGo, that's a publicly traded company, people there might be legitimately concerned that there is fraud happening because all of these billions of dollars are coming into World Liberty Finance in ways that are direct violations of the Emoluments Clause. If a shareholder in that entity said I would like to have a to have a vote on this, and management said no, we're going to push for a no-action review, would you push back, or is that too dangerous because it would cause you to make Donald Trump angry?

Well, again, I can't speak to any particular issue or or company, but as far as shareholders have their rights under state law, and if they want to, you know, vindicate those rights and and push forward.

We're out of time, but Milton Friedman said shareholders are ultimately in charge, not management. I don't know why we're stepping on shareholder rights under your leadership. I yield back.

I thank the gentleman for yielding, and the gentlewoman from California, Miss Kim, is now recognized for five minutes.

Thank you, Chairman, and thank you, Chairman Atkins, for being here. For far too long under Gary Gensler's runaway rogue regulation, the commission drifted away from its mandate of protecting investors and facilitating capital formation, using regulation as enforcement. He single-handedly set back the crypto industry in this country by over a decade. And since taking office, President Trump and you have taken important steps to reverse that trend. Thank you for your work. In Congress, we have worked hard to assist those efforts with the passage of the GENIUS Act, and now we must continue that work by getting the CLARITY Act across the finish line. One way that the SEC has achieved that is through the Crypto Task Force and its focus on unlocking tokenization to promote innovation and efficiencies in our capital markets. So can you provide a brief update on the efforts to unlock tokenization and the benefits tokenization promises to bring to the U.S. capital markets?

Well, yes, well thank you very much. Tokenization, I think, is a very important innovation that's coming about and tokenized securities that can be traded on-chain, I think has a future benefit just for the transparency that distributed ledger technology brings to the issue and then the prospect for a T+0 sort of payment versus delivery type of regime on-chain. So that can help de-risk the financial services industry by a lot. So we want to encourage that and then have rules around this that, you know, protect investors, protect issuers, and the other stakeholders in this whole effort.

I know that one avenue you are exploring to unleash tokenization is the the potential innovation exemption. So how is the commission approaching this innovation exemption, and is there a timeline to issue that exemption?

Well, we're planning to do that here this year and so we're hoping that you all in Congress will, you know, adopt the CLARITY Act or whatever however you do it and then that arrives on the president's desk. But in the meantime, we're working apace and this innovation exemption, I think, will be a good watershed.

Sure. And one aspect of Crypto Task Force has been collecting industry feedback around topics such as tokenization. So how does the commission plan to utilize the feedback that you collect on that issue from the Crypto Task Force?

Yes, so well we've done a number of roundtables and and we've received a lot of commentary coming in from all sorts of stakeholders in and around the digital asset industry. So we are distilling that and using that to help, you know, refine our what we will come out with with respect to this innovation exemption.

Okay. You know, outside of digital asset regulation, another area that you have charted the SEC in a more positive direction is with regards to Form PF. So as you review Form PF, will the commission consider a new rulemaking to return Form PF to its original FSOC-focused purpose?

Absolutely, it's a joint rulemaking with the CFTC and we have also been consulting with the Fed and Treasury, you know, in this regard.

Thank you. With the limited time that I have remaining, as you know, I've been working hard to provide regulatory relief to the Office of the Small Business Advocate by exempting it from the Paperwork Reduction Act. So would reducing onerous red tape like this provide the advocate with better information on the state of American small businesses?

I believe so, and that's obviously Congress has put that in statute as far as the Office of Small Business Advocate, so whatever may help the work of that office, I think would be very helpful.

Well, thank you very much. That's all I have for you today and thanks for being with us. I yield back.

Thanks the gentlelady for yielding, and the gentlewoman from Massachusetts, Miss Pressley, is now recognized for five minutes.

Chair Atkins, I've read an article where you once said, quote, "The ultimate boss is the investor," unquote. Do you still stand by those words?

As far as as far as the markets go, that's definitely true.

Well, I think we can all agree if bosses are to make good decisions, they need to have access to good data. Unfortunately, as the head of SEC, you are denying investors access to information, you're changing the rules that have been put in place by limiting what data is provided to investors and reducing how frequently data is provided to investors. Now, I've had colleagues across the aisle complain about information overload and pass bills, investors so often only have access to quote-unquote material information. The problem with that approach is that Republicans are arbitrarily choosing what information is material and immaterial to investors. Now, I've been on this committee eight years since I arrived in Congress, and I know that investors care about a wide range of information ranging from executive compensation to costly climate-related disasters like floods and fires. So I want to focus on diversity disclosure specifically. The SEC approved a rule that required public disclosure on the race and gender of board of directors. Now, this information was important to investors because study after study has confirmed that diversity is good for your bottom line. It is good for business. So can you explain why you believe investors shouldn't have access to this information?

Well, I investors should have access to material information and I mean, in general, it comes down to the company's decision as to, you know, what they believe is material or not. And then and because again, it's for the reasonable investor, it's not for particular investors to, you know, as the rubric, that's the way the the court has ruled. So anyway, so our rules are geared to to the company and it requires companies, issuers to disclose material information to the public. And so, you know—

Well, reclaiming my time, I just again, in order to be a to make good decisions, you have to have good data, and the majority of investors are saying that they want this information and many reports and CEOs have affirmed that diversity is good for business and for the bottom line. So that answer is insufficient for me and I just again, a study of institutional investors that handle hundreds of billions of dollars have found that 30 percent of investors wanted to know if senior management was diverse. So that means roughly one out of three investors consider this information important. So I think that makes it material. Disclosures about board diversity, climate risk, use of AI are essential for investors to make smart decisions. After all, in your words, the investors are the ultimate boss. So to reiterate, bosses need data to make decisions. Now, that's why I am reintroducing the Greater Supervision in Banking Act, or GSIB, to mandate disclosures by the biggest banks: Bank of America, Wells Fargo, JPMorgan Chase, Goldman Sachs, and others. Investors and consumers alike deserve to know how these institutions are impacting climate change, how that's increasing costs in deadly natural disasters. Investors deserve to know whether these banks are rewarding themselves with large executive bonuses, and investors deserve to know that the board of directors at these companies represent them and their interest. They deserve it and they want to know. Chair Atkins, can you commit to finding a way to ensure this information is available to investors when when one out of three say this is what they want? Can I count on your partnership?

Well, again, so the court has held that that information is material, not depending on, you know, what the proclivities of one or another investor.

All right, I got it, you're sticking to it. I was, you know, Chair Atkins, I'm trying to give you a win here. You you don't have a stellar reputation on this front. You know, the 2008 Great Recession when you were first a commissioner at the SEC. But, you know, we don't have to go back decades, I mean just a few years ago you were advising FTX when that company collapsed. So I really saw this as an opportunity for partnership for you to redeem yourself there, Mr. Chair. I was trying to give you a easy alley-oop. I do believe we need fair, orderly, and efficient markets, and the American people deserve that instead of another global financial crisis. I yield back.

Thanks the gentlelady for yielding. The gentleman from South Carolina, Mr. Timmons, is now recognized for five minutes.

Thank you, Mr. Chairman. Chairman Atkins, it is good to see you and thank you for appearing before the committee. I appreciate your engagement with Congress as we work to restore a regulatory framework that supports competitive capital markets and long-term economic growth. After several years of rapid expansion of the SEC rulebook, it is encouraging to hear you mention that some regulations have become bloated and, in certain cases, obstacles to capital formation. You've indicated that the commission is now focused on reducing unnecessary compliance burdens while preserving strong investor protections. I agree with that goal and want to begin by discussing how the commission is addressing recent rulemakings that impose significant costs with limited benefits. One example is the 2023 Fund Names Rule amendments, which the SEC estimated would affect roughly 66 percent of funds and add substantial compliance and operational costs, ultimately borne by American savers. So my question is this: consistent with your goal of reducing unnecessary burdens, how is the commission or its staff reviewing or addressing these prior rulemaking excesses, and what principles are guiding your approach to recalibrating rules that may have gone too far?

Well, we're undertaking that in all of our divisions with respect to reviewing old rules and in particular the Corporation Finance Division, you know, with respect to Reg S-K, which is kind of the bedrock of corporate disclosure. But you've named others as well with respect to mutual funds and whatnot. So all of those add costs to to investors ultimately, they bear the cost. And so we have to have a it's good to have a retrospective view of that to weed out things that are not really fit for purpose.

Thank you for that. Let me now turn to public company disclosure and capital formation. I understand that last year the commission received a proposal from a U.S. stock exchange requesting that the SEC initiate a rulemaking to allow for optional semi-annual reporting for public companies. The goal was to reduce reporting burdens and short-term market pressure while fully preserving material disclosures for investors. This proposal closely mirrors what President Trump called for last fall as a part of a broader effort to spur initial public offering activity and encourage more companies to access our public markets. At a time when fewer firms are going public and staying public, it is worth examining whether our disclosure framework has become over-focused on short-term results at the expense of long-term growth. Can you share how the commission is thinking about potential changes to the public company reporting framework, including possible approaches to reducing short-term reporting burdens?

Yes, well I've announced that we're looking at that. This debate has been going for now a few decades. The requirement started out as annual reporting up until 1955 when it went to semi-annual and then in 1970 went to quarterly. And then the UK, which kind of followed suit with us, changed back to semi-annual in 2014. So we're looking at all of this. I'm agnostic on this, we want to hear comments from people as to, you know, what's the best. Maybe and it we were considering doing this for smaller companies where perhaps semi-annual might be more appropriate for them. But we're we'll be seeking comment on all of this.

I think if the shareholders are in favor of it, it should be considered and maybe even create a larger burden, maybe a two-thirds burden to achieve it. But I think it's worth looking at. Thank you. Finally, I want to turn to venture capital and regional access to funding. When we talk about venture capital, it often seems like the conversation is limited to companies in New York, California, and Massachusetts. In fact, data from Carta shows that in 2024, California alone captured nearly half of all VC investment in the U.S. Meanwhile, entrepreneurs in my district and across the other 47 states continue to struggle to raise venture capital. So do you agree that the lack of geographic diversity in VC funding is a problem?

Well, I know there is a difference in the distribution across the country, and what the causes are, I'm not sure, but...

Well, one way to address this challenge is through my bill, H.R. 4431, which is part of the bipartisan INVEST Act. The bill modernizes the definition of a qualifying VC fund under Section 3(c)(1) of the Investment Company Act by increasing the beneficial owner limit from 250 to 500 and raising the capital cap from $10 million to $50 million. These targeted common-sense updates would expand access to capital for startups outside traditional financial hubs while preserving strong investor protections. Thank you. I yield back.

Thank the gentleman for yielding. The gentleman from New Jersey, Mr. Gottheimer, is now recognized for five minutes.

Thank you, Mr. Chairman, Ranking Member. Chairman, thank you so much for being here. On August 2025, executive order aims to increase access to, and I quote, "competitive returns and asset diversification necessary for everyday Americans to secure a dignified, comfortable retirement." This order directs the Secretary of Labor to consult with the SEC to carry out its policy objectives. How has the SEC coordinated with the Department of Labor on this executive order so far?

Well, we're actively working with them and the Department of Treasury on these issues, and it's an important, very important matter.

Thank you. The order also directs the SEC to revise existing regulations and guidance relating to, quote, "accredited investors" and "qualified purchaser" status. Do you expect the SEC to pursue changes to these definitions?

Well, we'll certainly look at them and see whether they need adjusting given passage of time and there's a lot of, obviously, a lot of different ideas as far as, you know, what's an appropriate way to decide who's accredited and who's not.

Thank you. Switching gears a little bit, there's been much discussion about the SEC's forthcoming digital asset innovation exemption. You've said that this exemption will, quote, "allow registrants and non-registrants to quickly go to market with new business models and services that do not neatly fit within our existing rules and regulations." Just yesterday, the founder of the SafeMoon token was sentenced to eight years in prison for conspiracy to commit securities fraud. And new services like pump.fun make it very easy to launch tokens backed by absolutely nothing. I believe we need clear guardrails and rules of the road for digital asset innovation to flourish in the United States, but we also have to have strong consumer protections. Can you discuss the timing and scope of the innovation exemption and how you are building consumer protections into it?

Yes. Well, so fraud is fraud, whether it happens, you know, in the crypto world or in paper certificates. And so we take that very seriously and, like you say, that really is a detriment to investor confidence if we're not active in that area. So with respect to the innovation exemption, you know, it will be, when we come out, the goal is to make it a cabined, limited-time type of exemption, but to allow innovators to operate in that within those limits and under supervision.

But you're concerned, like I am, about these tokens backed by nothing, like these pump.fun type things, right? I assume that's not what the SEC wants.

Absolutely. Right.

Okay. I think it's very important we keep an eye on that. Obviously want innovation, but we also don't want scam artists out there and hucksters pushing stuff online, and I think we have to be very careful about that. The SEC has rightly been spending a lot of time and attention on digital assets, but there are many other opportunities for updating and modernization. Electronic record-keeping rules, e-delivery, cross-trading, Form PF reporting for private funds, co-investment by open-end mutual funds, and many other areas are ripe, in my opinion, for modernization. Are these initiatives in your SEC still getting appropriate attention? How do you and your staff prioritize them and how are you thinking about them?

Well, we have a lot on our plate, obviously, but you know, we're, I'm really very pleasantly surprised coming back to the SEC how gung-ho the staff is in all the divisions to dive into these. I think, you know, we've restored confidence in the morale of the agency and people are leaning into it.

Yeah, and I think the modernization piece is key, right? I think there's a lot of opportunity to do it. I appreciate that you've previously recognized that tokenized securities are and will continue to be securities. Would you agree that market-making activity of tokenized securities should be treated in a similar manner to traditional financial market-making activity?

You know, well, those are those big issues of, you know, how to adjust the rules to deal with a new reality. But we definitely are looking in that to that in our trading and markets area, and we've been having roundtables, you know, in this regard and working obviously with the CFTC on it as well.

Thank you. Digital asset market actors consistently tell us that regulatory fragmentation between the SEC and CFTC creates uncertainty, discourages responsible innovation, and drives activity offshore. I appreciate the steps you've been taking and the CFTC to harmonize definitions and disclosure standards and supervisory expectations to reduce regulatory fragmentation. Can you discuss some of the challenges that market actors face navigating across conflicting regulatory frameworks?

Yeah. Well, I like to use the analogy of SEC, CFTC, two fortresses with a no-man's-land in between. So traditionally, you know, that field there, that no-man's-land is littered with the bodies of would-be products that could never really make it through that gauntlet. So we are, you know, out to change that and to work in harmony.

Thank you so much. I yield back.

Thank the gentleman for yielding. I now recognize myself for five minutes for questions. Chairman Atkins, thank you for being here today and thank you for your leadership at the SEC in an effort to restore the Securities and Exchange Commission to its statutory mission: protecting investors, maintaining fair and efficient markets, and facilitating capital formation in the United States. For too long, market participants, particularly in emerging and innovative sectors, have faced uncertainty driven by enforcement actions that have effectively substituted for policymaking in avoidance of rulemaking for areas where you could provide clarity. That approach undermined due process, chilled innovation, and drove investors out of sectors that they were interested in because of the uncertainty around capital formation. Your public commitment to moving away from regulation by enforcement and toward transparent rules-based frameworks is a welcome shift. Thank you. So we saw former Chair Gensler seek to expand the SEC's jurisdiction over non-security digital assets for years. You know, he would avoid answering really basic questions about whether something is a security or not and tell everyone to come in. He would just never allow them to leave. In fact, would engage in enforcement actions. So from your perspective, what should the distinction be between digital assets, tokenized real-world assets, and securities? So you could have a tokenized security, you could have a tokenized commodity, you could have tokenized real-world assets. Do we get a bright-line test adequate in the Clarity Act, or how do you see that bright line if you're calling balls and strikes? What's your best way to describe it?

Well, ultimately, you know, the real answer is harmony between the CFTC and the SEC so that nobody is, you know, uncertain where to go. And that's been the problem now for a long time. But basically, if we focus on tokenized securities as, you know, the, you know, through investment contract and that kind of analysis, but then also concede that, you know, we have digital commodities, digital tools, and other digital types of tokens that are clearly in the CFTC realm, that will, I think, help bring clarity. So the Clarity Act, you know, takes great steps towards that, and then the two agencies working in harmony can help.

And I thank you for creating a task force to focus on that as well. So even once we pass a law, hopefully the Senate will pass something resembling what we've passed and get this across the finish line soon, there'll still be rulemaking. So thank you for kind of front-running us in that sense to work towards having clarity there. And you've also previously stated, quote, "the right to have self-custody of one's private property is a core American value." So I think self-custody is critical. You can't really have decentralized finance without the decentralized part. Right now, there are obviously intermediaries who serve a function in the market, but they also take a pretty big rake. So a lot of the opportunity to make markets more efficient and to get more capital for the investors or those that are raising the capital comes from disrupting the intermediaries. Where do you think we can do that and still ensure that we provide investor protection?

Well, well, those that's an important issue that, you know, we definitely are focusing on. But as you say, the right to private wallets and that sort of thing is very important and so we want to make sure that that is recognized in the rules that we develop. And so it already is, you know, to a large extent with respect to the legislation that's being...

Yeah, I think that's one of the key things really that they're debating in the Senate on the Clarity Act is, you know, fundamentally, Western civilization depends on private property. Right now, we've embraced this third-party doctrine where there's an intermediary between you and your assets in every scenario, whether it's a security, a bank deposit, anything else, and all this surveillance. I thought Hester Peirce, Commissioner Peirce, did a great job with a speech back in the summer that she titled "Peanut Butter and Watermelon." And of course, I'd encourage everyone who hasn't read it to read it. But, you know, the point is that a party phone line where the operator had to connect two parties referenced, "Oh, I know your grandpa's the guy that used to put peanut butter on watermelon." Well, that's an awkward thing. I just asked to be connected to my, you know, my grandpa. And so there's always this intermediary there. And the technology's there for us to do it. I think we can do it with good investor protections. I really hope the Senate works through the issues in the Clarity Act and we've continued to work with them. But I think the crux of it really comes down to self-custody. Because at the end of the day, if you always have to have an intermediary between your assets and yourself, you don't really control your own private property. And that's a radical shift in Western civilization. I will have questions for the record. My time's expired and I yield. I now recognize the gentlewoman from Texas, Ms. Garcia, for five minutes.

Thank you, Mr. Chairman. And Mr. Atkins, I wanted to start by just reminding us that on December 11th, the President said that affordability was a hoax, that it was made up by Democrats. And then recently in January, he says that Democrats don't talk about it anymore, that it's all solved. Do you think affordability is a hoax? Just yes or no.

Well, I'm trying to address affordability through the...

Sir, just a yes or no. Is affordability a hoax?

Well, I don't know if hoax or not, but it's something that we need to be concerned about.

Why is it so hard to say yes or no? You're the head of the SEC, you're a lawyer, you're well-trained, you've dealt with these issues. You're talking about affordability. Do you talk about hoaxes all the time?

No. I mean, I'm focused on the reality of the situation.

So is it a hoax or not?

I think that affordability is an important issue that we need to address.

So you refuse to answer. All right, well, let's move on. The SEC Canon of Ethics states that, "The SEC is an independent agency and in performing their duties, members should exhibit a spirit of firm independence and reject any effort by representatives of the executive or legislative branches to affect their independent determination of any matter being considered by this commission," end quote. Yes or no, again, yes or no, do you agree that the SEC is an independent agency?

Yes, it's defined that way in the statute.

No, but do you believe, I mean, we can all read the statute, you're a lawyer, I'm a lawyer, but do you believe that it is an independent agency?

If Congress calls it that, then that's it. But...

I'm asking you if you think it is, sir, not what Congress thinks or not what the statement says, because obviously I read it.

Right. Well, as you read, you know, it's independence of mind, independence of thought.

So again, you refuse to answer. Yes or no, has the President, his family members, his cabinet, or staff in the White House, have they ever asked or implied that you propose or implement a certain policy?

The President's issued executive orders, so that could obviously fall under what you just said.

So is that a yes? So is that a yes?

He's issued executive orders.

Is that a yes? Sir, why do you refuse to just say a simple yes or no?

Because it's not susceptible to a yes or no answer.

Well, as a lawyer, I think, you know, I'm offended that you wouldn't respond. Yes or no, has the President, his family members, his cabinet, or staff in his White House ever asked that you take or decline any enforcement action?

No.

No? Great, we finally got an answer. How regularly do you consult with the President, his staff, his family, or members of his cabinet?

Sorry, say that again?

Well, let me try to be louder. How regularly do you consult with the President, his staff, his family, or members of his cabinet?

I talk to people at the White House and in the cabinet a lot, so I would say that's pretty regular.

But do you consult with them on any of the operations or doings of the commission?

No.

No? Can you commit here today that for every decision you make as SEC Chair, you ultimately will make that decision yourself, free from outside pressures or influence from this administration?

Oh, absolutely.

Well, good. We finally got some answers. Now let me ask you about the, I want to follow up on Mr. Lynch's questions. You've dismissed about eight cases: Coinbase, Binance, Gemini Trust, Ripple, Kraken, Consensys, American CryptoFed, Ondo Finance. On what basis did you dismiss those cases?

Well, in general, it had to do with, you know, questions about registration and that sort of thing that was left over from the last administration.

I'm not understanding what kind of registration. Do you think the previous administration filed frivolous lawsuits?

Section 5. So the SEC has a very mixed record on these and we are trying to clarify those rules along with what you...

Does this protect investors in any way by dismissing these cases?

Those cases all have flaws and were dismissed.

Looks like you're not really wanting to give me any detail, so we'll follow up in writing. What about the closed investigations: Robinhood Crypto, OpenSea, Uniswap Labs, Crypto.com, Fuse Crypto, and Depository Trust...

The gentlelady's time has expired. I would encourage you to submit the questions for the record. I now recognize the gentleman from Tennessee, Mr. Rose, for five minutes.

Thank you, Chairman Davidson, and thanks to Chairman Hill and Ranking Member Waters for holding this important hearing. And thank you, Chairman Atkins, for joining us today. My colleagues on the other side are citing press releases and enforcement actions brought by the former Chair with large stated monetary penalties that the commission never ever collected. Chairman Atkins, given that it's a new day at the SEC, what is your enforcement philosophy on returning the SEC to its core mission?

Well, thank you, Congressman. We are focused on going back to basics and as, you know, is in our mission, so to build fair, orderly, and efficient markets and investor protection and capital formation. Those are the three pillars. And so we are calibrating our enforcement efforts to that, so no more sort of gotcha types of things, no regulation through enforcement. We're focused on, as we go about our rulemaking, to have it through notice and comment rulemaking and regular order is to be returned. And so with respect to enforcement, I take very seriously that investor protection mandate that we have and to go combat fraud out there in the marketplace, not chasing numbers and not chasing things that, you know, are not at that core.

Thank you, Chairman. I appreciate very much that kind of clear-eyed view of what the purpose of the Securities and Exchange Commission is, and thank you for your leadership in redirecting and refocusing that back on the purpose for your organization. Chairman Atkins, we've seen a troubling rise in so-called ramp and dump schemes, usually involving Chinese companies, which fraudsters gradually where fraudsters gradually promote a stock and then rapidly sell off their holdings, leaving investors with significant losses. Many of those victims, including hardworking Americans, including those I represent in Tennessee. Given that the SEC can only suspend trading in such securities for up to 10 days, what additional tools does the commission have to counter these manipulative schemes beyond that limited window? And could you also speak to the role the exchanges play in detecting and preventing this kind of fraud and whether there are steps Congress and policymakers here could take to better support the SEC's efforts to protect investors here at home?

Yeah, well, thank you for that. But yes, under Section 12 of the Securities Exchange Act, you know, our role is limited. So we have the, as you mentioned, we can stop trading for up to 10 days. And so we've done that in 14, well, 13 companies and the most recent one, the 14th, we stopped trading for, it was on the New York Stock Exchange, American Stock Exchange, for one day and then the stock exchange took over from us after that to investigate that. So these particular schemes, you know, can really be very costly for investors. So but beyond that, we can only delist a company if they haven't kept up with their registrations and up-to-date filings and that sort of thing. So it really is incumbent on the exchanges, the SROs, to police their markets. And so we're working with them to, you know, try to ensure that that happens.

And Chairman, I congratulate you on the great staff that you've been assembling, and I know they serve you well. The SEC's organizational chart shows a large number of offices and divisions, many of which have closely related functions as well as a significant number reporting directly to the Chair. I suspect you're painfully aware of that. Is the commission considering ways to improve efficiency and coordination, perhaps by better aligning related offices and streamlining the number of direct reports to the Chair?

Oh, absolutely. Yes, we're, I am very focused on that. I still remember when I worked for Arthur Levitt back in the early '90s and he looked at the org chart and just was astounded at how many direct reports he had. He had more than I do now, probably. But anyway, so yes, it is very much wanting to have a real refresh as to the organizational chart.

I'm not sure we have time for this, but I'll try to get it in. Under former Chair Gensler, the SEC embraced so-called stakeholder capitalism to the benefit of left-wing shareholder activists, but to the detriment of ordinary investors saving for retirement. I was glad to see the commission issue Staff Bulletin 14M last year to rescind previous guidance that restricted companies' abilities to exclude extraneous ESG-related shareholder proposals. Can you please touch on that? I guess you'll need to do that for the record as I am out of time. Thank you.

I thank the gentleman for yielding and I now recognize the gentleman from New York, Mr. Torres, for five minutes.

Thank you, Mr. Chair. Chair Atkins, you know, I've long been a believer in emerging technologies like crypto and blockchain, but as you know, every industry has actors good and bad. Crypto is no exception. So have you taken any enforcement action against any bad actor in the crypto industry?

Yes. I mean, we have brought cases for fraud, outright fraud, and we're in litigation with some of those right now.

Involving digital assets.

Involving digital assets. One actually up in your city or up in New York.

Understood. I want to make three observations about structural shifts in the stock market and then have you respond. First, the stock market is more passive than it has been historically. Since 2020, passive strategies have accounted for a majority of U.S. equity assets under management. Second, the stock market is more concentrated than it has been historically. The top 10 account for 40 percent of the S&P 500's market cap, about a third of the S&P 500's total earnings, and about a majority or near majority of the S&P 500's earnings growth. And finally, the stock market is less representative of the economy than it has been historically. The number of public companies, as you have noted, has fallen by around 50 percent since the 1990s. Many of America's most dynamic, highest-growth companies have yet to go public and many of them are content to remain private for longer stretches of time. So the stock market is more passive, more concentrated, less representative than it has been historically. Since the stock market is structured differently than it has been, should we expect the stock market to perform differently than it has historically? Is the stock market of the 21st century qualitatively different from the stock market that has delivered an annualized return of 10 percent since 1959? What are the significance of these structural shifts and what does it mean for the performance of the market?

Yeah, great questions. So I don't pretend to have an answer, but that's exactly why we need to make it more attractive, attractive again to be a public company so that we can have more of a diverse type of makeup there. And so in fact, there's this great story about was told by the CEO of a very, very large public pension fund where they got out of the private markets back in after the financial crisis and they called it the dark years where they lost, they went down from 90 percent coverage of of their anticipated benefits down into the 70s and they attribute that to not being involved in the private market. So to have a well-diversified portfolio, you need to have exposure to private markets. If we can make IPOs great again, make public companies make up a much more diverse type of the marketplace, I think we can maybe solve that part of the problem and get back to your point.

I'm cautiously optimistic about tokenization. I do believe tokenization has the potential to create a better, cheaper, and faster financial system: greater tradeability, instantaneous settlement, greater liquidity, greater fractionalization of shares, and hopefully with it a greater democratization of finance. Just like digitization through the internet brought a wave of new customers, consumers to commerce, tokenization could bring a wave of new investors to the capital markets. Having said all that, an innovation like tokenization is not without risk. And so how do we pursue an innovation that disrupts traditional securities without destabilizing a traditional securities regime that has served our nation reasonably well for more than 90 years?

No, I agree with you very much. And so that's why we'll do this deliberately. We will make sure that issuers, you know, have insight into where their securities are and that that tokenized securities are securities and will be treated as such and that we need to adjust where we have to the rules but to ensure that there's transparency, integrity to the markets and to make sure that the national market system is upheld.

Do you have a timeline for the tokenization of securities or?

It'll be unfolding here over the next few years, but the what we do now will be really seminal in in making sure that it's done, you know, deliberately and in good order.

And what are the implications of tokenized securities for corporate governance? It's been said that tokenized securities could mean the end of proxy voting. What is your sense of the implications?

I think it might be even more, it might be better for it, frankly, because then you'll know where securities are and who's, you won't know voting necessarily, but I think there'll be a lot more accountability and transparency.

I see my time is about to expire. Thank you.

I thank the gentleman for yielding and the gentleman from Indiana, Mr. Stutzman, is now recognized for five minutes.

Thank you, Mr. Chairman, and thank you, Mr. Atkins, for being here today. Just want to ask real quickly, one of my colleagues asked you earlier about Form PF. Do you have an update on when any rulemaking might be finalized?

Yes. Well, we of course extended the deadline for the compliance with the what action was taken a couple years ago, but we are working actively with the CFTC. It's a joint rulemaking and so we are that is a current issue that we're addressing.

Okay, great. In August, President Trump signed an executive order to facilitate increased access to alternative investments for 401(k) investors, empowering American workers with greater choice in how to grow their retirement savings. Since then, the Department of Labor has submitted rulemaking to the Office of Management and Budget. The order also identifies a role for the SEC in advancing the President's objectives. How has the SEC coordinated with the Department of Labor to carry out his order and what factors have shaped your approach?

Well, we are actively collaborating with them and especially EBSA, and we're also working with the Department of the Treasury on this and we've met the staffs have been in active collaboration and also I've met with my with the Secretary of Labor and the Deputy and also of course talked to the people at Treasury as well, including the Secretary. So this is an important issue and has to be done correctly and there need to be guardrails around it because as an investor in the private markets over many years, I, you know, know the good, the bad, and the ugly there. And so we need to make sure that we are addressing this properly. But as I just mentioned to Mr. Torres there that, you know, there you know, one cannot necessarily have a balanced portfolio in this current market without having exposure to the private markets and in fact, many ordinary employees already do through their pension funds have exposure to the private market. So why not extend it to 401(k)s?

So the executive order also directs the SEC to consider parallel reforms to facilitate increased access to alternative investments, including revisions to existing guidance relating to accredited investor and qualified purchaser status. Do you expect the SEC to to... ...pursue changes to those definitions and are there any other potential changes or reforms that Congress should consider to enhance investor access to alternative investments?

Well, I've been in and out of the SEC now for about 36 years and so this issue comes, it's like Groundhog Day over and over and over because it is a very, it's a bit, it just needs addressing and updating because the lines that are being drawn, why should a professor of economics who makes $100,000 a year not be an accredited investor but somebody who just, as a teenager or so who has inherited some wealth and becomes an accredited investor? So that doesn't make a lot of sense on its face. So there, we're exploring alternatives to these, the current situation.

Great. Thank you. I know they've called votes. I don't have any yes or no questions for you, unfortunately. So I'll yield back.

Thank the gentleman for yielding. Pursuant to the previous order, I declare the committee in recess subject to the call of the chairman. We will reconvene immediately following floor votes. Chairman Atkins does have a hard stop at 1:15, so we'll try to get back as quickly as possible to squeeze in as many member questions as possible. So the committee stands in recess.

[Gavel sounds.]

[Gavel sounds.] The committee will now come to order. I will recognize myself for five minutes. First of all, Chairman Atkins, thank you for being here. I'd like to start by talking a little about the accredited investor definition. Currently, becoming an accredited investor is subject to requirements that revolve around income and wealth. I personally find this phenomenon to be a little puzzling because wealth is not necessarily an appropriate measure of financial sophistication. We currently have a narrow merit-based pathway to become an accredited investor for investment professionals like those holding a Series 7 or Series 65, but I think there's a larger question at play here. And is it fair to gatekeep investment opportunity based on financial wealth or based on knowledge and merit? Chairman Atkins, do you believe that wealth is a poor proxy for financial sophistication?

Yes, I know a lot of dumb rich people. [Laughter.]

My legislation, the Equal Opportunity for All Investors Act, which is also a provision within the INVEST Act, creates a new pathway to become an accredited investor through an examination created by the SEC and administered by FINRA. This will certainly open the door further for knowledgeable people to get access to sophisticated investments and, if understood properly, can open the door for them to earn higher returns. Next, I'd like to discuss an issue that I've heard has become a significant problem for businesses in my district in Nebraska. In recent years, there has been a growing and troubling trend of sophisticated third-party litigation financiers, many operating from foreign jurisdictions, backing predatory plaintiffs' lawyers to bring baseless claims against U.S. public companies. I've heard about this issue from trucking companies in my district and from insurers, but I think there's an interesting tie to our capital markets as well. These foreign investors are participating in our capital markets and they may have access to non-public, case-specific information about the litigation they fund. A bipartisan House Select Committee on the CCP report warned that foreign actors could use litigation financing to gain access to sensitive IP and other commercially viable information. It follows that litigation funding also presents the potential for market abuse if litigation-related financial interests are used to inform hedging, short positions, or other trading strategies tied to the outcomes of material legal proceedings. Mr. Chairman, from an investor protection and market integrity standpoint, does the Commission have specific concerns about potential intersections between litigation finance and trading activity?

Well, just speaking personally, I do have troubles with that and I know there are ethical issues as well that have presented themselves over time. So whether or not that falls within our bailiwick or not, I think it bears some attention.

Has the SEC under your leadership considered the ramifications of these third-party suits? Is this a conversation that's happening at the SEC?

Well, I'm happy to begin it. I haven't, like I said, I think that's an issue worth addressing.

And just to give some context here, we are in Nebraska the home to some very large trucking companies and tort reform is dearly needed in the American Southeast. But when you've got a foreign growth fund funding a plaintiff's lawyer to go after a trucking company and get a billion dollars for a fatality, which is terrible and should always be prevented, it is really making it hard to do business in America and move the things the truckers move. So I appreciate that. I think there are a couple of potential bad outcomes here from a national security perspective and I wanted to use my opportunity today to put this on the radar. Number one, as the Select Committee on the CCP report indicates, it's possible that foreign entities could gain access to U.S. intellectual property as part of a civil suit. Number two, it's also possible for any foreign entity to use our legal system to try and delay the release of a new product or service in order to give a foreign competitor more time to get their products out there. So with that, I yield back and I recognize the gentleman from California, Mr. Liccardo, who is now recognized for five minutes.

Chairman, thank you for your testimony today and thank you to the Chair. I represent a good part of Silicon Valley and I know you're very familiar with the importance of capital markets there, both public and private. And certainly there are great concerns and I appreciate you are addressing some of those concerns about the challenges, particularly for early-stage companies to be able to go public. And certainly I've been working with colleagues on the other side of the aisle as well on, for example, extending the ramp for emerging growth companies. And I appreciate there are other things you've mentioned in your testimony, particularly about tying materiality more tightly to disclosures and other things that might reduce some of the burdens of going public. I wanted to shift though to the other part of that phenomenon which we're seeing, which is this massive shift, at least in the percentage of total investment from public markets to private markets. And the massive growth we've seen in private equity in particular and now increasingly exposing retail investors to private equity in secondary markets. And I know there are many folks in Silicon Valley who themselves are quite sophisticated, they might be at Kleiner Perkins for example, but are very concerned about the transparency and frankly investor protection as we're starting to widen access to private equity. Is there anything that the SEC is considering or might consider to improve transparency and protect investors who are increasingly getting into those secondary markets?

Well, thank you. It's a very important issue and I take it very seriously that as we deliberate over how to allow more access to the private markets, which have their own kind of special qualities and whatnot that are hugely different than the public markets, we need to do this deliberatively with good guardrails. So we, the Department of Labor and Treasury, are very much focused on that aspect of investor protection. But as I mentioned earlier in the hearing here, it is because of the way the public markets have developed and how we have half the number of public companies as we had 30 years ago. We are now, the United States is fully 50 percent of the world's capitalization, equity capitalization. So everything is spread among fewer companies obviously, but we have really strong, robust private markets as well. But there are a lot of buyer beware issues there in the private markets where we need to make sure that we're not just opening up retail investors to something that they're not necessarily ready for or aware of all the pitfalls. So a lot has to rest on the trustees and the other people who are managing 401(k) funds. So we have to really make sure that they are aware and that we set up parameters around which they may put their beneficiaries' money into markets that are not public.

I appreciate that. It's worth thinking about that significant shift from public to private. Should we be concerned in Congress? Are there particular actions we should be taking to try to redirect that percentage in some way to encourage more of those capital dollars in the more transparent public markets?

Well, I don't know. I leave that to you, but ERISA is a very strong tool actually and so that's why the Department of Labor is central to this and I know they take that very seriously and the standards under which trustees are bound. And so I think that itself is a good tool that we have to try to then put in the proper guardrails.

Thank you. I yield.

Gentleman yields back. The gentleman from Pennsylvania, Mr. Meuser, who is also the Chair of the Subcommittee on Oversight and Investigations, is now recognized for five minutes.

Thank you, Chairman. Good afternoon, Chairman. Nice to have you with us. So I'd like to focus on capital formation, how the SEC can ensure our public markets remain the strongest in the world for companies looking to raise capital. The INVEST Act, I think as you know, is a strong step in that direction, reducing such barriers for small issuers, strengthening private markets, and expanding capital formation opportunities. Under your leadership, working alongside the President Trump's pro-growth agenda, IPO activity rose nearly 50 percent, increasing from 154 offerings in 2024 to 226 in 2025. So that's of course a very, very positive development. On January 28, I'd like to ask you this question. We sent a letter requesting any recovered deleted text messages from the former Chair Gensler. This request stemmed in part from Chair Gensler's well-known lack of cooperation with this committee. These texts are of significant interest to our oversight work to fully uncover what was deleted. Can you comment on the current effort?

Well, we are actively looking to see what we can do to reconstruct the missing data because obviously there are statutes and other things that require us to keep that. So we're working on that and I can keep you updated.

Thank you. I appreciate that. As you well know, the Consolidated Audit Trail, or CAT, is the massive trade tracking database the SEC mandated exchanges and broker-dealers to build. Many Republicans have serious concerns about the scope of data collection and the privacy risks posed by such a large centralized system that collects investor data. Does the SEC believe it has or should seek authority to reimburse the industry mandated to fund the CAT or eliminate the system altogether?

We're actively working with the members of the CAT committee and to try to right-size it. And then we have a lot of issues that need to be addressed and so we will be actively working on this and ultimately will be talking perhaps to the appropriators about some of these issues.

Okay. Thank you. And I appreciate your response to my letter on the 2023 Money Market Fund Rule. You noted the staff is working with industry, particularly on liquidity fees and institutional prime funds. Based on what you've seen so far, do you believe those concerns warrant reopening, rewriting, or eliminating portions of the 2023 rule?

Well, all these things are open. The markets change a lot and I have my concerns about some of those aspects of that rule with respect to the markets and the funds. So yes, we're looking at all of these issues.

All right. I appreciate that as well. Crowdfunding is a critical way for early-stage businesses, as you well know, to raise capital from the neighbors, friends, families. Unfortunately, small issuers are hit with onerous financial disclosure requirements as soon as they raise over $100,000. Do you agree we need to remove crowdfunding barriers for small issuers?

Absolutely.

Great. And I'm glad you agree because my legislation, the ACCESS Act, does exactly this, which was included in the INVEST Act. So that's good to hear. You've stated before that you want to make IPOs great again. Exchanges I meet with say this year, minus the disruption during the government shutdown, has been terrific for IPOs. How have you achieved this success?

Well, I think part of it is just change of tone, frankly, and to tell people that we are out to try to make it attractive again to be public and that we're serious about it. And so the three pillars that I mentioned earlier about trying to right-size and modernize, rationalize the disclosure framework. Second is to focus on litigation reform that through the few ways that I have in my toolbox to do that. And then third is to focus on weaponization of the corporate governance apparatus. And so through those, this might be at the margins, but I think just that tone has been able to attract people and increase interest. And so we will continue that as we put points on the board as we come out with proposed rules and then ultimately finalize them, I think that'll help do it as well.

Great. And if there's anything within that or in anything that you're working on that you recommend us to codify, we would very much appreciate your guidance and suggestions. Thank you, Chairman. I yield back, Mr. Chairman.

Gentleman yields back. The gentlewoman from Michigan, Ms. Tlaib, is now recognized for five minutes.

Thank you so much, Mr. Chair. Chairman Atkins, is it a coincidence that only weeks after Trump family-owned World Liberty Financial launched its stablecoin, the SEC's Division of Corporation Finance that oversees released a statement declaring that stablecoins are not securities?

I don't think one has to do with anything with the other, but the stablecoin aspect came from ultimately from the GENIUS Act, obviously, which took stablecoins out of—

So no coincidence. Let me tell you why my residents think it wasn't a coincidence. During the 2024 election cycle, nearly half, Mr. Chair, of corporate spending came from the crypto industry. Did you know that?

Half of corporate spending came—

It says nearly half of corporate spending came from the crypto industry, the crypto industry into the 2024 election cycle. Did you know that? I can share with your team the report on that. So crypto intervened in dozens of elections across our nation, spending more than banks and oil companies. Experts have called it, quote, "one of the most aggressive corporate spending sprees in modern political history." Fast forward to today, Mr. Chair, and the SEC has dismissed or stayed enforcement actions against major crypto-related donors or supporters of President Trump, such as Coinbase, Kraken, Binance, Justin Sun. The Commission has seen a significant reduction in staffing, of course, right, with perhaps one in five staffers leaving. Whistleblower awards are down dramatically and policies are issued without allowing public comment. Do you see what I'm saying here? And the SEC has basically stopped its enforcement efforts in favor of regulation by the CFTC, which has far fewer resources and staff. So my residents are asking, is this a coincidence? I don't think so. And Mr. Chairman, you know, out of all due respect, I hope you understand the incredible importance of your position. Because it looks to me like cryptocurrency is getting a tremendous return in its political investments. I can't fault anyone who thinks your agency is bought and paid for, especially my constituents and residents that watch, again, how the current administration is, you know, violating Emoluments Clause and so much more in regards to running the business out of the Oval Office. But other things there is, and I don't know, you answer this question, folks are listening. So is it a coincidence that Trump pardoned the founder of Binance, who was convicted of money laundering, and now Binance holds roughly 87 percent of all Trump stablecoins in circulation worth $4.7 billion? Are you aware?

Well, Madam, we follow the law as far as the actions of the Commission and we take our duty seriously on enforcement investigations and rulemaking.

So but why, Mr. Chairman, why after Justin Sun invested $75 million in Trump's World Liberty Financial, did SEC drop its civil fraud case against them?

Well, I can't address any particular matter, especially ones that are still under consideration and investigation.

No, you dropped the case. It's done. You said there's no fraud.

Not completely. So anyway, we dropped the registration issue, which I think is a red herring from the previous administration.

Okay. So another one. Months after the firm tied to the Emirati royal family purchased 49 percent stake in World Liberty Financial—and just for folks to understand, Trump's World Liberty Financial worth half a billion dollars—the Trump admin then allowed the UAE to purchase 35,000 highly valued AI chips. Did you know that one?

Again, I can't speak to any particular—

It just smells funny. Is that, people still say that, right? No? I don't know, it just looks very suspicious. And it doesn't give us a lot of faith that you guys are not being influenced by the Trump administration's World Liberty Financial investments. It just, Mr. Chairman, I understand, but all these dropping of cases and everything just poof, out of the window. It doesn't look right.

The gentlelady's time has expired. I'd like to thank Chairman Atkins for his testimony today. Without objection, all members will have five legislative days to submit additional written questions for the witness to the Chair. The questions will be forwarded to the witness for his response. Chairman Atkins, please respond no later than March 18, 2026. This hearing is adjourned. [Gavel sounds.]