Thank you Carla [Garrett] and the rest of the committee for holding your second virtual meeting since the beginning of the pandemic.  Welcome Bill [Manger] to the Committee.  Today’s agenda continues the important dialogue that you began last month on how the Commission can help small businesses address their capital needs in light of COVID-19.  The specific, actionable suggestions raised by members of the committee provided the impetus for the Commission’s actions earlier this week to provide temporary, conditional relief for small businesses to pursue Regulation Crowdfunding offerings.  Thank you for those ideas and we share your eagerness to see issuers use the temporary rules. 

There may be more we can do to aid small businesses with urgent funding needs.  What solutions might be hiding within our federal securities laws?  Are there temporary adjustments to other exemptions that we should consider?  For example, Regulation A essentially prohibits issuers from making offers through television, radio, or print advertisements in newspapers after qualification.  Providing hyperlinks to the offering circular in these forms of media is impossible.  Would the ability to reach potential investors through these forms of media meaningfully expand the pool of investors for Regulation A offerings?  If so, how can we allow the use of such media without compromising investor protection? 

The intrastate exemptions available under Rule 147A and Rule 147 also warrant attention.  Now that many Americans have fled urban areas to their second homes or rental properties, should we allow intrastate offerings to include part-time residents or others with a nexus to a state?  Not only would this change expand the utility of the exemption, but it would allow people to invest in the communities they are living in and relying on during the crisis.

The second item on your agenda is a discussion of our proposed rules to facilitate capital formation and to expand investment opportunities by improving access to capital in private markets.  The proposed reforms would increase the offering limits of Regulation A, Regulation Crowdfunding, and Rule 504 offerings, and would remove unnecessary friction from the capital-raising process.  I look forward to your thoughts on the proposals, as well as whether the proposals go far enough. 

Bold action will be necessary to facilitate capital formation in the coming months, which are sure to be difficult on many fronts.  Last night, I was listening to a podcast interview with a serial entrepreneur.[1]  What I heard in her voice was not discouragement at the challenges that lie ahead, but enthusiasm about building a new business to help people better cope with new realities.  I hope that you will apply similar optimism and creativity in thinking through our proposal.  For example, should we deregulate offers and focus our attention on the time of sale?  Should we, to the extent our statutory authority allows it, start anew with our offering framework and create a simpler one to provide a clear path for issuers trying to raise capital at different stages of their lifecycle?     

Thank you and I am excited to learn your thoughts on these subjects.