the floor of this committee, this committee stands in recess. [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation] [inaudible conversation]

[inaudible conversation] [inaudible conversation] this meeting will come to order. we recognize the gentleman from pennsylvania. >> thank you. we have -- i want to address some of the comments that were made prior to the recess. from my perspective problems caused by the rule changes respecting money markets remain an issue because the problems they cause are apparent. they discriminated against miscible and corporate debt and in doing so prompted the dislocation of a trillion dollars. it's led to an increased

borrowing cost. that's why my bipartisan legislation attracted broad support from over 70 cosponsors, many of whom sit on this committee and the endorsement of over 300 national state and local organizations. nothing in my bill. [inaudible] it would restore the level playing field between government funds. this issue remains relevant. i understand the senate is taking another look at this this week. with that i wanted to talk for a moment about your testimony as you discuss there are still significant barriers that prevent companies from going public and staying public. the jobs act and legislation help address some of this legislation but there's more work that needs to be done.

i have a bill that will markup later today that would extend certain disclosures for emerging growth companies that will remain but for the current five year limit. as you know they've accounted for more than 90% of all ipos over the past two years. can you discuss some of the ways we can help companies go public and stay public? >> yes, let me give you a general response that question which is i do think, i think the jobs act in the creation of the concept for skilled disclosure to being a public company was and remains a very good idea and i would love to see the on ramp be modernized to reflect the markets we have today. specific areas are the thresholds where you have the benefit of being, are they set in the appropriate place or

should they reflect our markets of today and our experience with the job act. i think we should look at those thresholds. i'm happy to work with you and other members of the committee in the proper place. i think they just want make sure, on, treating, part of the attraction of going public is trading. to the extent that we can facilitate better training, more liquid trading in our small and medium-size companies, if we should be looking to do so. >> the chairman touched a little bit on sarbanes-oxley with his opening-round. this legislation was enacted 15 years ago in response to and run and the scandal that they had. in your opinion, has sarbanes-oxley been effective?

>> it's a big piece of legislation that has come to a single statement about any sweeping piece of legislation from a markets point of view and that's very difficult. there are aspects that i think investors got a significant bang for the buck. independent audit committees, the focus on high-quality financial statements is a big tank for the buck. the mother things, good but not as significant. >> what components represent the biggest cost and/or compliance challenges. >> applied to a large company in regard to 404 and that to a

smaller company, the relative burden on a smaller company had been higher. i've seen improvements in the area of application of 404 but i do think we should look at that relative cost and the size of smaller companies and we intend to do so. >> what is the timeframe for your review of 404. >> our staff is looking out for four now and we will be discussing it, at least plans for discussions at next week's opening. >> the chairman recognized jarman from maine. >> thank you very much. i want to let you know. [inaudible] i appreciate you being here. i noticed that you folks are finalizing rule 30 -- three and i'm very grateful that you and i

had a back-and-forth many times on this in your to be looking out for the interest of small savers and investors drop the state of maine in rural america and i will be closely following this. thank you very much for listening to my concerns. you folks are the primary regulator, mr. clayton, for non-bank financial institutions like pension advisors. i worry a lot about our small businesses and all small savers and investors in the state of maine and you are one of ten votes and you are the individual at the regulator that has the most influence because your space is the asset manager space when it comes to f-stop. what i'm concerned about is when a non-bank institution like a pension advisors more mutual

fund is designated as f-stop, we all know the studies cost will go up and rates of return will go down. i think they concluded that something like a 25% reduction over time as a result of the designated. [inaudible] what drives me batty about this is if you're in the asset management community, they're not on your balance sheet. you're an agent for the customer there's no systemic risk if something goes wrong because it means that my performance is better than yours, your clients will go from you to me and life goes on. all i'm asking you sir is to take a hard look at how this was passed on the floor with the big bipartisan vote and it establishes transparency and clear guidelines so that a fund camp company or asset manager, if they're concerned about going

through these additional costs and investors get hurt because of those additional costs that are unnecessary, but there is an offramp, there is a set of guidelines that says if i do this, i can get underneath this regulatory regime is unnecessary. can i get a commitment from you mr. clayton that you will be lookinworking really hard to mae there's transparency and clear guidelines when it comes to this being designated. >> i'm not going to commit my other members of that stock. >> but you have the most influence when it comes to this stock. i understand the comments you're making and the concerns and i am certain that those concerns and comments will be discussed. >> and i would encourage you to discuss them in the most

energetic and passionate way on behalf of those who are designated. moving onto another issue, the last time the fe fec updated wan 1961. roger and i were just kids. the internet and social media have even been invented yet. would you take a look and commit today to the people listening and commit to taking another look at social media and the use of the internet and asked managers do what other companies do and that is to promote what they're selling. >> when we rolled out 30 -- three we also rolled out investor experience questions and we are looking at enhancing our communications with investors and in particular to make sure that investor medications flecked the communication technologies of

today. >> thank you very much. will the shareholder proposal, last time you were here we discussed this little bit. every shareholder has the opportunity to weigh in with management comes to how the company is being run, products offered, so forth and so on. the $200 $2000 threshold gives n opportunity to express your views but it also drives up the cost, drives up when he set a short time ago about going public, and i worry about every other small investor in maine in america that wants the opportunity to own part of america. are you going to be looking at. >> i will look at the whole proxy process. >> thank you for that commitme commitment. the chair recognizes the german from texas, mr. williams. >> think you mr. chairman. the last time you were here before this committee you and i

had a productive discussion about retail and fraud. you mentioned it was important to think creatively about how we structure our behavior so that is more important, more difficult to commit a fraud. it becomes harder. i'm encouraged to hear that you turned your attention to main street businesses and play a critical role in our economy and communities. our question, since your last visit can you provide any updates on retail fraud or any related task that your teams may be undertaking to prevent future fraud? >> we did form a retail broad strategy task force. i appreciate that they've done that so group of people dedicated to rooting out cause and more importantly there's a number of ponzi schemes where we've identified them, brought asset freezes to a halt.

i would like to think as quickly as we could because the longer they go on the more money that goes away and invest money we can get back for investors. that's been a focus of ours. the ico space is prefaced by saying that the technology and watching technology has promise but the ico space had a great deal of retail fraud. i am very pleased that our enforcement division has pivoted to addressing that issue. >> thank you. you yourself have rightly recognized that the field market allows mainstream investors to participate in a crucial growth process. can you touch on the role of small business capital formation in the advocate office and what steps it will take to allow for growth in mainstream investor participation. >> thank you for that question. obviously the offices new and is

any new office it will find its way. it has some corrections from congress. what i really want and what i'm talking to candidates, i want someone that one were making rules or policy that this is how it's going to affect the small business so think about it when you do this. in particular, you know what, this is too costly to apply to a small business or this won't help a small business. here's how we could adjust the rule without adversely affecting rule protection and transparency. it will be good to have someone in the building for that's their job. >> lastly you have a unique vantage point, one that requires you to work across several industries and countless stakeholders.

>> our job is to make sure that market function as well as they can to support our economy. there is always room for improvement in that. we come to work every day looking to improve the functioning of our markets so the economy can be as good as possible. >> i have some time left and i yield back to the chairman. >> the john yields back and recognizes the general from north carolina. >> thank you, mr. chairman and also we appreciate you being here.

they offer shareholders to have a voice while not burdening a small group of shareholders. what can they do in the meanti meantime. if you don't mind i'll take a minute. i think they should under stand the corporate governance in america has changed substantially as a result of

various changes and that the ability of shareholders to directly influence the actions of management has increased. that has benefits, but it's been a change and we should be looking at that change. i think communicating with investors are worth that change. >> you mentioned that looking at the proxy. what would you anticipate for them looking at that process. >> i'm contemplating opening that again. we can get updates on this issue and other issues around the proxy process, including the plumbing. do we have the right plumbing in light of i want to switch over

to virtual currencies at the moment and attack these with mre about investor fraud. can you tell me what they are using to determine which token projects should be targeted for enforcement actions and further is that criteria focused on promises made by the developers or the expectation of purchasers. if you are behaving badly in this market, we don't want you to do that. in terms of what i would like

people in this market to understand, there is a way to raise capital, and is compliant with the law. i want people in the space to recognize and do that. if after year of this kind of dialogue people are moving to that thank you, mr. chairman i'm always last in line so just a couple ideas. in the realm we have had a

number of issues in the public offering space we appreciate your offer is trying to move us to a more entrepreneurial ability and providing more formation and chances. what are the key steps that you are looking to take in addition to getting us to the formation and growth in an area where we don't have the city next to us. we have small banks and others. holiday impact the new rolls in helping us get there with some of our new businesses. >> i talked before about providing a path, let's just stay in the larger company. i would like to see us modernize the investor definition to make it easier for more people to

participate in funding. i would like to use technology to eliminate some of the unnecessary frictions that go into raising capital on a smaller scale. in terms of availability. i'm hopeful some of the things we are doing will free mart local capital. >> you see any of this happening yet? i know in my prior life before i got it all done in this job in congress i had a lot of trouble getting some of my entrepreneurs to find investors. can you identify ways to

simplify it and if you've seen projecprogress or more ipos comp in a small business space. is that something you have data on or something you can provide us with? i'd love to know if what you're doing is actually helping and are we actually moving people more into the space. >> let me say this. i think a year is too early. one of the issues about measuring success in the space is sometimes it takes a fair amount of time. the ipo process for for itself, by the time they think about the public offering until they actually achieve a vote, it takes long before they contact us and long after it. it's a long way of saying, i don't want to take credit for any uptick in ipos, i don't want

to say they were unsuccessful, i think we are doing the right things. >> believe me, i'm in a situation where i've taken my clients to other areas to find ways of getting them resources and funding. now it looks like were in a better space and we were i was just wondering if there's any change. >> i think were in a better space than we were. feels like were in a better space for the activity i'm seeing i like. do i want to say absolutely here's some evidence. >> the next year you'll have more data for us. >> i just want to jump to the whole crypto currency, bit coin, everything that the excitement of the day and what the sec is doing and what will be looking at as this becomes very popular and more investors are getting involved in the crypto currency. maybe to point out one or two things in the last 30 seconds about what you're doing because i'm running out of time. >> in the.

crypto currency space, the examples that people cite, that's not in our direct jurisdiction although there are issues with those crypto assets including in the trading what people use them for. i want to be clear to the extent that someone is bringing those assets to a regulated entity, that regulated entity needs to go through the same procedures. i think they need to understand that they need to follow the rules. this has a lot of promises and can only make cost. >> thank you so much. my time has expired we passed a

multi- trillion dollar tax cut as you're well aware and i think the theory behind it is that it was spur investment and increase hiring for working people, but some of the data has come in and according to the bureau of labor statistics some are down since the tax cut past. what are companies doing with the windfall? i guess one of the things the popular press indicates is that there's been a lot of stock buybacks. how do you react to that assessment. i don't have the data, but if

you're asking me that companies that have repatriated capital and are holding cash, what are they using that cash for? >> yes. >> to the extent that there using it for stock buybacks and what do i think about that? >> i suppose that's what i was asking. >> stock buybacks are an efficient means to return capital to share but holders. they are more tax efficient than a dividend, for example. that's probably going into the judgment. >> so the policy that you support? >> --dash. >> you think it's a legitimate way to operate? >> here's what i think. companies who decide to do that, they should be telling the shareholders what they're doing with their money and do it in the most responsible way. >> okay. in the first quarter of 2018 corporations brought back a

record 178 billion in stock. according to a survey of major corporations they say stock buybacks other number one use of capital. instead of spending the money on wages or research and development, they are going big into the stock buybacks as you indicated so i just, i guess my question for you is last week your commissioner asked them to revisit the buyback rule which hasn't been revised in 15 years. do you agree question how do you react to these suggestions that the commissioner made? : : :

>> i do think disclosure of stock buybacks is important. people who are shareholders should know whether you're buying back stock or using it for other things. but our rule goes to how you actually affect it in the market. >> given the time is wasting, hope you forgive me cutting in. >> no, not a problem. >> do you agree with commissioner jackson, that the huge surge in stock buyback activity can lead to problems particularly since research shows a substantial number of ceos use buybacks to cash out their own shares? >> well, what's interesting is, executives sell stock on regular basis. they have to tell us. they have to file forms when they're selling stock. i'm not sure about a connection between stock buybacks and

executive selling but, i want to make clear is, that kind of activity, it has to be disclosed to the marketplace so we can look at it to see if there is any connection. go ahead. >> let me just tell you this there is a report in my office just recently drafted share this with you submit it for the record without objection. >> without objection. >> so you know in 1968 the average ceo made 20 to 1. 80, 34 to one. now it 890 to one. mattel has nearly 5000 to one. mcdonald's 3100 to one. the gap 2900 to one. walmart, 1100 to one. are you concerned by these numbers? does that level of executive compensation create instability in the market? and shouldn't, at least part of our income inequality problem

because of the, the dramatic shift in how people are compensated? >> gentleman's time expired. >> >> quickly you can respond. >> quickly i respond. i want to make sure shareholders understand how people are being compensate and criteria that go into the, making those decisions. how is the comp committee making those decisions. that is an important part of shareholder communication. >> thank you, sir. >> thank you. >> the gentleman yields back. chairman recognizes himself for five minutes. chairman clayton, glad to have you before the committee today. thanks for your incredible stamina being here today. we're glad to have your answers to all of our questions. i want to start to talk about a finra rule, rule 4210 i have concerns about in terms of

fairness issue between bank-owned brocker dealers and nonbank-owned broker-dealers, relates to the agency security market. posting margin for that. i won't debate with you whether or not the sec has the authority to impose margin requirements. thinking perhaps the reserve act governs that but would you agree we don't want to have public policy on the face of it discriminates by organizational entity? in other words in this example, bank-owned versus nonbank-owned broker-dealers? >> i agree. >> so mr. quarles, when he was here representing the federal reserve he agrees as well. would you be willing to work with the federal reserve to create a common sense solution here that's fair to the brokerage community at large? >> yes. >> thank you. i appreciate that. also i've introduced a bill, hr 6021 which is of interest also to the brokerage community. this goes back to my days in the

industry as an independent broker-dealer and a bank broker-dealer as well, as it relates to small, privately-held dealers that don't hold customer funds, purely introducing brokers under the rules. this relates, go all the way back to sarbanes-oxley where all brokerage firms were required to have a public accounting oversight board qualified auditor no matter their size or complexity. this bill, and senator cotton introduced a companion in the senate, would permanently waive that for small, private, noncustodial broker-dealers, something we got waivers for along the way between 2002 and recent years s that something you would think the commission would support knowing they fill campus ply with sec rules, finra rules, on audited financial statements in coordination with gaap this what i learned the number of qualified firms has

dropped, something i had personally not not known until i started studying this issue. >> so the short answer is yes. the longer answer is, i like the criteria thaw cited in terms of who we're talking about and, actually raised this issue with the pcaob to get their fuse. i, i don't want to get ahead of them but i expect their views would be that, you know, this is not an area, i was going to say, this is area we should question whether this is a necessary step. >> right. >> particularly in light of criteria you cited. >> thanks for that constructive nature this hearing, this committee hearings testimony all the time about tailoring regulations for community banks. it's weekly for eight years at least. we don't always pay attention to tailoring our rules through finra and through the commission

for our very small entrepreneurial broker-dealers. yet the burden shift is very similar. so i appreciate your -- >> particularly those as you said don't hold customer assets. >> let's be clear for our viewers. these are privately-held companies introducing brokers, which means they clear all their securities through a clearing agent. so they're not holding customer funds. because we're all sensitive to making sure you oversee these entities in a safe and soundmanner. >> thank you for doing that. i want to make clear that is a distinction very important to me. >> and it is very important to these members, you would be i don't think in any way, what i have seen audit fees gone from maybe five to $8,000 a year for a typical gap small introducing broker overseen by finra at your direction and some of those tripled as number of compliant accounting firms drops and complexity of doing that exam goes up. i'm not sure if the commission

is getting concomitant safety and soundness gains. so thank you for that. last topic i just want to introduce is one of my favorites and that is how the federal government is trying to interpret the volcker rule. se participated in a release of volcker 2.0. a lot of us found it very complex. i'm not sure you made a big improvement. i'm not saying you personally but the collective agencies. are you diligent looking at comments for volcker rule reproposal? >> certainly around the commentary. this is an area where the comments are going to be illuminating. >> i appreciate that. chairman's time more than expired. i will now recognize the gentleman from west guinea for five minutes, mr. mooney. >> thank you, mr. chairman. first, secretary powell, thank you for coming here. you've taken all these questions and food work you're doing

there. i want to make a comment and then a question. i want to add my appreciation for leadership in proposing expansive loan rule aperture as private equities roll and capital markets has expanded, technology changed business models the opportunity to update regulations to reflect these changes is long overdue. current regulatory impediments, they deter capital formation, limit competition and decrease efficiencies. thank you for addressing this. thatthatthat is a very importan. i'm from a rural area, west virginia. there. is misconception a startups and invest something for people in big cities, and people with large bank accounts but they're for people in rural areas too. i would like you to tell me the importance of capital formation to investments and workers in rural areas. >> all i can say i agree with you.

the availability of capital, whether it is through investment or credit is essential to starting a business. that's, just all there is to it. so i agree. >> i was at a fair about a year ago. a young lady this found a way in west virginia to get syrup from trees. she wanted to start a small business to make this syrup and sell it. she was at a craft fair, showing her display there. she had the hardest find anyone to give her initial startup loan to invest in the product. went to banks and administrations, couldn't find anybody to do it. i think restrictions are well-intended by the other side, they are hurting people that need investment start-up dollars. this family had a dream in my district. had it come true. they made a great product. couldn't find anyone to invest. encourage the deregulation. get impediments out of the way for americans in rural areas as well as cities so they could have their dream of running

their own business come true. with that, mr. chairman, yield back the balance of my time. >> the gentleman from west virginia yields back balance of his time. the gentleman from georgia, mr. loudermilk. for five minutes. >> i'm batting cleanup, mr. chairman. i will take this as brief as possible. thank you for taking this amount of time. it is very encouraging. i want to thank you for your work in the best interests standards for brokers. every time i would be at a home after the department labor new judiciary rule i was inundated with brokers and those advisors with the confusion and the difficulty this, this provided them. it was a significant impact. i thank you for, what the work that you have done there. >> now you've, you stated that this low pace of initial public offerings is a significant problem and with what i would call mind-boggling growth of our

economy. the gdp is up 3%, knocking at the door, 4% possibly. wages are increasing. consumer confidence is growing. i mean every, every statistic is way beyond anything that anyone ever anticipated would be at two years ago. and i think, i mean we're all celebrating that. at least most of us are. because of all that growth it may not be clear why the slow pace of ipos is a problem. can you explain why not seeing fewer initial public offerings in light after robust economy is a real concern. >> we just talked about the capital being essential to growth. the availability of capital is strong. we have, we have private capital markets that are as strong as they have ever been. availability of private privateo

finance growth. that saud, it still does trouble me that our public capital markets are less attractive. i don't want to do anything to i'm pea -- impede capital. i don't want to do anything to the private capital market to make the public capital market relatively better. this is a good thing. let's not do anything to it but broad participation in capital formation and investment in america is a good thing. i want to make sure we continue to have broad participation and the public capital markets are the most efficient way for ordinary americans to get access to ininvestment opportunities. >> i do agree with you. i just think there is confusion with a lot of folks. how, how does this interact with the anticipated increase of mergers and acquisitions we're expecting? >> so, look, companies,

companies, the number of companies in our public capital markets can be reduced for a number of reasons. people -- go private, they merge, things like that. to the extent the pipeline isn't being filled, you have fewer choices. now when a company, when two public companies merge, you have a larger -- >> light. >> you don't lose capital in the public markets but you do lose the numbers. >> okay. move on to another topic, cryptocurrency, something i've been following for a while with an i.t. background. i agree we've seen cryptocurrencies being used for nefarious purposes. money laundering, terrorism, financing, human trafficking, drugs. however, i believe the underlying technology of blockchain is something that we should pay close attention to. we should divest cryptocurrency

from underlying technology. i've been advocating for us to look at blockchain technology as potential technology to resolve some of our cybersecurity concerns and issues. i want to get your thoughts on that? >> i agree with you. >> thank you. >> mr. chairman, i yield back. >> gentleman from georgia yields back. my pleasure to recognize my good friend from connecticut, mr. heinz, for five minutes. >> thank you, mr. chairman. chairman clayton, i may be the last although you never know who will appear. great to see you here. i want to start by commending you. i read the testimony and emphasis on main street investors and gives them all confidence and i think that is a great approach. i really appreciate your intense focus on icos. to me, the frenzy in that space feels a lot like what i remember in '99, 2000 around the internet space. i think there is a real opportunity for people to get

hurt. i appreciate your focus and aggressive attention to that i want to bring up two topics, neither which will surprise you, both i think are consistent with main street confidence. one indirectly which is something i know we've talked about before but my ongoing obsession what i think is questionable behavior and charging of fees in initial public offerings, and absolute perfect consistency of the 7% gross spread and the reason i care about that maybe not so much main street investors but the tout the jobs act, we're working on jobs 2.0, we're talking about saving young companies, a million, two million, three million max in their early stages. ipo of $200 million, 7% gross spread, that is $14 million, very real money comes at very sensitive time for young companies. since we last talked about this, i sent you a letter noting one of your fellow commissioners has taken an interest in this and,

mr. edgars who was before us agreed with me, it didn't feel like competitive behavior. so anyway i sent awe letter and very much hope, again, i'm not prejudging this, there is enough there that we, finra, you, need to take a look to make sure we have good competitive market capitalism operating in ipo pricing. there is no question there. >> you and i share a passion for competitive markets. >> well, the letter make as specific ask that you and finra study it. i will not hold you to that right now because you suspect probably just got the letter and looking at it but i think it is important to young companies. more consistent with main street investors, this is really about main street confidence. i continue to be very concerned about what i regard as sort of the legal ambiguity and mess around insider trading. i continue to be troubled by the fact that it looks like we have inconsistent, unpredictable, fuzzy law around insider trading

driven largely by decisions some of which go with each other and some which don't in the second circuit. so i would like, actually there is a question attached to this speech, which i would like to hear you for a minute or two on whether you think the time is right for congress to finally in statute define the crime of insider trading? >> so you and i have talked aboutthis. i have talked about it with people who are very experienced including judges, people who hear the cases. you know, there are arguments both ways on this. bringing more certainty to the space. eliminates some of the behavior that troubles you. you feel is not caught. i think, if i'm, i don't want to assume, but you're troubled by the fact there is probably some behavior that you think should

be sanctioned and isn't? >> no, i'm not -- yes, but i'm actually, in the spirit of main street confidence, i'm not a lawyer, not expert on a lot of things, but i'm an expert on sentiment, that is what i do. there is general sense out there, with reversals of activity in the second circuit in particular, we have no idea what insider trading is. somebody gets convicted and convocation gets overturn -- conviction gets overturned, in the aggregate that is huge uncertainty and risk in the mind of individual investors why should i play if i'm at a disadvantage because i'm doing this honestly? >> understand that. i'm not sure a statutory approach would bring anymore clarity. that's my issue. i'm very happy to discuss it, look at it, but when you look at jurisdictions that do have a statutory approach, i'm not sure that there is any greater

clarity regarding behavior. i can, i can tell you, look, you know how i feel about this. i may be biased. when people bring me when i was in the private sector fact patterns, would say, hey, what do you think about this activity? it wasn't very hard for me to say, i don't like that. >> yeah. okay. to be continued. thank you very much, mr. chairman. chairman, i yield back balance of my time. >> gentleman from connecticut yields back. gentleman from ohio, mr. davis is recognized for five minutes. >> thank you so much for being here, chairman. and thanks for what you and your team at sec making sure our capital markets stay the world's best. i especially thank you for work on icos, and what little time i have left. with one sidebar. earlier this year i introduced the due process restoration act earlier this congress and it relates to the sec's use of

administrative law judges. as you now know the scream court ruled this practice is unlawful, unconstitutional and should not proceed. could you give us any guidance or reaction to that decision? >> no. because i haven't read it. >> fair point. look forward to working with the sec how to move forward and how to, how might our existing law or bill really fit with the path forward. toward that end our office is building the what we hope to be the first ico body of law in terms of clarity around the regulatory framework for icos because i think a light-touch regulatory framework can do for our capital markets with icos what it's done on some other things. provide certainty, provide clarity and provide security, not just national security but for protections against fraud. i've been concerned that

disparate set of court opinions might not be as coherent as we would like, frankly, as sec would like. consumers would like. and in particular, investors would like. so if the u.s. is going to truly be a world leader in this critical distributed letter technology, i think we need to get this regulatory certainty. to use an example of folks that have tried to do this, ripples just one of many digital assets that come to mind. i'm aware there are numerous court cases regarding this company. do you think it's prudent for congress are or the sec to lead the way in clarifying what is a security or commodity instead of waiting for the courts? >> so i think, as regulators of the securities market it's important for us to bring clarity to those markets, i do

but i think we are doing that. we have turned to this space. we have issued guidance. the space is developing but all of that guidance and our enforcement actions are rooted in a very well-tested approach to the raising of capital in the united states. and, i can't be more clear about this. i am, i am not going to advocate for any fundamental changes in the way we raise capital, to accommodate the technology. now the technology can make what we do more efficient but i'm not going to change the rules, because we have a new technology. >> fair point. the howie test has been there and i appreciate frankly director hindman last week that ether is not viewed as a security. there was some concern after some of your remarks that everything looks like it fits with the howie test and --

>> when you're raising capital for a project? >> right. and as i think you and i agree certainly many companies have essentially engaged in regulatory arbitrage and used white papers to raise more capital than they could through the existing framework. however some, for securities. that body of law i think you guys taken an effective approach. >> we want to help people. i'm not saying do it and then we want to help people. >> and you set up an office to be able to do that and equipped it with resources. so i appreciate that. one example of people that have tried to follow the reggae plus. that has 90-day period where they are supposed to receive feedback. there are companies that have gone well past 90 days at this point. they're waiting a decision. is that decision delayed because

reg a-plus are decisions are normally delayed or we're going through a different set of scrutiny for ico-type companies? >> i'm not aware of any specific facts but i can tell you that the rega process, if somebody submit as deficient filing it is going to take longer than the usual period of time because you have to send it back to them and have them resubmit. like if it doesn't have financial statements. >> correct. so, could be specific things but i just want to highlight you have made a way forward for people to comply with existing security laws. you have done good enforcement actions. i look forward how you are moving forward. look forward to continue to operate this legislative certainty. my time expired. i yield, chairman. >> thank you. >> the gentleman's time has expired. now the gentleman from nevada is recognized for five minutes. >> thank you, mr. chairman and, thank you, chairman clayton for

being here this afternoon. as you are aware las vegas suffered the worst mass shooting in history, october 1st. las vegas is my hometown. i represent part of las vegas. 58 people lost their lives, over 500 people were injured. my community, as you can imagine, is still trying to heal from this tragedy. now given congress' refusal to take any evident to prevent gun violence we've seen many corporations step up, from dick's sporting good to dealt at that airlines. ceos are rejecting those who say there is nothing we can do. i applaud them for leading corporate social responsibility. and to help save lives and prevent gun violence in the future. like congresswoman maloney mentioned earlier i would like to talk about citigroup. after the tragedy at parkland a

few weeks ago, citi announced new gun policies for financial partners, require background checks and prohibit guns for teenagers. i know you're familiar with those guidelines. it is reported in april, a republican member of the sec, michael piowar threatened citigroup saying because of their private gun policies, that the bank lacks support for their agenda at the sec. now republicans and democrats can agree no regulated entity like citibank should be punished at the sec i have a couple questions, mr. chairman. have you ever been contacted by anyone at the nra about citi or bank of america gun policies? >> no. >> never? >> been contacted -- >> in regards to this specific policy that somebody will be punished if they don't, follow some sort of background checks on their policies?

>> no. >> okay. have you ever spoken with citigroup or bank of america about their gun policies? >> no. >> okay. and have you ever discussed any company's gun policies with the sec staff? >> not that i recall. >> so you never had any sort of conversation in regards to any gun policies with any -- >> i'm thinking because, you know, people have disclosure. they make disclosures, but have i -- are you asking like gun policy in earlies of it sec policy, vis-a-vis -- >> absolutely, yes. >> again, no. >> as i stated before, a republican member of the sec, michael piowar threatened citigroup, back in april, saying because of their private gun policies that the bank lacks

support for their agenda at the sec. not only is that unethical, that is illegal. so i'm asking you as the chairman, have you ever had that type of conversation? >> that report and that incident, i'm not going to discuss that. that's been the subject, raised before and as i said, the question of whether there should be an investigation is on the table and, it is inappropriate for me to discuss anything related to that subject but as far as your other questions to me,. >> let me ask you this. are you aware of the gun policies? >> yeah. >> new implemented gun policies? >> the, when you say the gun policies, you mean the policies that private companies adopted? >> yeah i'm aware of them. >> do you believe commissioners and staff should require greater ethics training to prevent this type of conflict of interest from happening in the future. >> i think that touches on what i won't talk about that in this

forum at this time. >> i understand a ig investigation has been requested. will you fully agree to cooperate with this investigation? >> i, i always cooperate with the ig investigation. >> thank you, mr. chairman. so lastly, just want to, again, thank you, for being here. thank you for being so patient with all of us. i hope that this is addressed. that our regulatory agencies, including the fcc, are not threatened, threatening private companies on behalf of the nra or any other special interest groups. as i said not only ethical unethical but also illegal. i yield the balance of my time. >> the gentleman from nevada yields the balance of his time. i want to thank the patience as the gentleman from nevada noted. without objection all will have five legislative days to submit written questions to the witness to the chair, forwarded to the

witness for his response. i ask the witness response promptly as you are able. the hearing is adjourned. [inaudible conversations].

[inaudible conversations]. >> this week booktv is in prime time, starting tonight at 8:00 eastern newt gingrich with his book, trump's america, the truth about our nation's great comeback. wednesday at 9:00 p.m., "in depth" fiction edition with best-selling thriller author brad thor. thursday night at 8:00 eastern, michelle obama on upcoming memoir, becoming. on friday at 8:00 p.m., add words with barbara ehrenreich, her book, natural causes. epdemic of wellness, certainty of dying and killing ourselves to live longer. watch booktv in prime time on

c-span2. as part of our 50 capitals tour, with the help of gci cable, the c-span bus visited alaska with anchorage the final stop on the tour. >> play as critical war making sure america's democracy is functional. provides common understanding what is going on. also provides a window in washington, d.c., those of us who are a far distance away can see what's occurring. >> we really believe it's important to offer these things to our customers because we believe in the network's mission, to be unfiltered and trusted media source. we proudly support their effort to inform and educate the nation on policy, politics, history, and current events. >> be sure to join us july 21st and 20 second when we feature our visit to alaska. watch alaska weekend on c-span, c-span.org, or listen on the c-span radio app.

>> c-span, where history unfolds dali. in 1979 c-span was created as a public service by america's cable television companies and today, we continue to bring you unfiltered coverage of congress, the white house, the supreme court, and public policy events in washington, d.c., and around the country. c-span is brought to you by your cable or satellite provider. >> next "the weekly standard"'s editor-in-chief stephen hays discusses the osama bin laden files and america's approach to counterterrorism during the obama and trump administrations. this is part of "the weekly standard"'s annual political summit in colorado springs. it is just under an hour. >> i would like to introduce two gentlemen heror