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Hester M. Peirce

SEC Commissioner Dissents from Order Blocking Proposed Bitcoin-Related Rule

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Today the Commission once again disapproved a proposed rule change that would give American investors access to bitcoin through a product listed and traded on a national securities exchange subject to the Commission’s regulatory framework.[1] This order is the latest in a long string of disapproval orders that the Commission has issued regarding bitcoin-related products.[2] This line of disapprovals leads me to conclude that this Commission is unwilling to approve the listing of any product that would provide access to the market for bitcoin and that no filing will meet the ever-shifting standards that this Commission insists on

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SEC Commissioner Peirce Offers Proposal to Fill Gap Between Regulation and Decentralization

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I appreciate the opportunity to be with all of you today.  Before beginning, I have to remind you that the views I express are my own and do not necessarily represent those of the Securities and Exchange Commission or my fellow Commissioners.[1]  Indeed, the views I will express today are not fully formed in my own mind and may not reflect my own opinions in the months to come.  To that end, I welcome the feedback of all of you and anyone else with an interest in the regulation of digital assets.  These issues are difficult, and many bright

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SEC Commissioner Peirce Speaks before National Economists Club

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Thank you, Cliff [Waldman] for that kind introduction.  It is an honor to be among economists today.  I am not sure why, but every time I speak to economists, I feel compelled to tell a joke. Maybe it is because the securities lawyers of which I am one and with whom I routinely surround myself can be a rather serious bunch.  Instead of starting with jokes, they insist that we start our talks with the following disclaimer:  The views I represent are my own and not necessarily those of the Securities and Exchange Commission or my fellow Commissioners.  That duty

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SEC Commissioners Peirce and Roisman on Proposed Rules for Funds’ Use of Derivatives

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We thank the staff of the Division of Investment Management (the “Division”) for undertaking the challenging task of devising and presenting for Commission vote a proposal to modernize the way we regulate the use of derivatives in investment funds’ portfolios. Derivatives are essential financial tools in today’s markets. They enable portfolio managers of registered investment companies and business development companies (“funds”) to manage and hedge risk, enhance portfolio liquidity, efficiently gain or reduce exposure to certain asset classes, reduce transaction costs, reduce volatility, increase yield, and otherwise assist in portfolio management. If funds were prohibited from using derivatives, investors would

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Commissioner Peirce Discusses SEC’s Enforcement Program

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Thank you, Meredith [Cross], for that kind introduction. It is an honor to be with you here today [November 4]. I must begin with my standard disclaimer that the views I represent are my own views and not necessarily those of the Commission or my fellow Commissioners.

It is hard to believe that 2019 is almost over. When I think back on the year, one defining theme is broken windows. Why is 2019 the “Year of the Broken Window”? I live in an condominium building with a lobby that has three sides of floor to ceiling windows. Three times this

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SEC Commissioner Speaks Before Forum on Small Business Capital Formation

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Thank you, Martha [Miller]. It is wonderful to be here in Omaha. Thank you to all the participants in today’s [August 14] program. Dean [Anthony] Hendrickson, thank you for welcoming us to Creighton University’s Heider College of Business. It is a beautiful facility that reflects the thriving economic region in which it sits.

I remember my first trip to Nebraska about twenty years ago. I was driving through the state and was just stunned by its Great Plains beauty. Since then, Nebraska has always been one of my favorite states, although I have not had many opportunities to visit. I

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SEC Commissioner Peirce Addresses the American Chamber of Commerce in Japan

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It is an honor to be with you today [August 7, 2019]. I have long wanted to visit Japan. Indeed, one of the options I explored following college was coming to Japan to teach English. Instead I ended up in Austria—not teaching English. My would-have-been students are certainly better off for it, but I am pleased to finally have the chance to be here in a learning, rather than teaching, capacity. Before I begin, I must give a standard disclaimer: the views I express today are my own views and not necessarily those of the United States Securities and Exchange

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SEC Commissioner Discusses Cross-Border Cooperation in Digital-Asset Regulation

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Thank you, Robby [Greene], for that kind intro. I am delighted to see that Robby, once my research assistant, has clearly gone on to bigger and better things. I also am delighted to be here in Singapore, by some accounts the global crypto-hub,[1] and appreciate the hospitality of the Singapore University of Social Sciences. I am particularly grateful for the opportunity to learn about the developments in crypto in Asia, which, as I do not need to tell this audience, is home to a very active part of the crypto community. Before I get too far along in my

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SEC Commissioner Peirce Speaks About Women on Boards

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A few months ago there was an article in the Washington Post about the baby on board signs that seem to be on so many cars.[1] The article’s timing was perfect because I had just seen one of those signs and remember wondering why they seemed to be making a come-back. At one point, those signs were everywhere, on almost every car. Then they seemed to disappear for a while, but now they are back. The article gave the history of the signs, which first hit rear windows in 1986, assessed the psychology behind their popularity, and reported on … Read more

SEC Commissioner Peirce Talks Exchange-Traded Funds

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Welcome to all of you. We are so delighted to be able to host you at the Securities and Exchange Commission for today’s workshop on exchange-traded funds (ETFs). The discussion today is sure to be fascinating. Aside from my greeting, everything I say reflects my own views and not necessarily those of the Commission or my fellow Commissioners.[1]

It is graduation season, so if you have time to walk around the city, you might see graduates of our local schools celebrating in their caps and gowns. The big story of this graduation season was the announcement by a wealthy

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SEC Commissioner Talks a Quarter Century of Exchange-Traded Fun

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Since the first exchange-traded fund (“ETF”) launched in 1993, ETFs have proven to be one of the most useful and successful innovations in the registered fund space under the Investment Company Act (“Act”) of 1940. The innovation did not stop with that first ETF. Besides being one of the fund industry’s most successful financial innovations, ETFs have been, and have the potential to continue being, the wrapper within which future financial innovations occur. Today, I want to share my thoughts on how ETFs can be used to facilitate further financial experimentation and innovations and how the SEC can fulfill its

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SEC Commissioner Peirce on the Need to Reexamine Rules

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Thank you, Peter [Easton] for that kind introduction. I appreciate the chance to be with you at today’s conference to discuss Hot Topics at the Securities and Exchange Commission. It is a small population of people who would describe anything the SEC does as hot, but I suspect there are more than a few in this room who might be a part of that unusual crowd. Given that we share an interest in these issues, I hope that we can keep the conversation as interactive as possible, but I will start with a few observations about SEC rulemaking and the

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SEC Commissioner Peirce Talks Digital Assets: How We “Howey”

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One year ago, I gave a speech—appropriately in Southern California—called “Beaches and Bitcoin.”[1] At that time—not so long ago in analog time but eons ago in digital time—the burning question was how to decide when issuing tokens constituted an offering of securities. The industry was rapidly developing and I worried that the SEC, as one of its potential regulators, would stifle its growth. I will admit today that I was very wrong, not about whether the SEC would stifle the industry’s growth—it has—but in how it would do it. Given that opening, I better give my disclaimer that my

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Commissioner Peirce Speaks on SEC’s “Secret Law”

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I would like to begin with the standard disclaimer plus an additional one that ties with the theme of this speech. The views I represent are my own and not necessarily those of the Commission or my fellow Commissioners. The supplemental disclaimer is that the views of the staff are not necessarily those of the Commission either.

My cousin recently reminded me of a well-known children’s book, The Secret Garden by Frances Hodgson Burnett. The book tells the story of a troubled, young girl who finds herself living with her widowed uncle and troubled cousin on an estate in the

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SEC Commissioner Speaks to Council of Institutional Investors

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Thank you, Mary [Francis], for that kind introduction and for the opportunity to be here today. Before I begin, I will give my standard disclaimer. The comments I make today represent my own views and not necessarily those of the Commission or my fellow Commissioners.

I consider it a great honor to have some time with you here this morning.  You represent such an important group of participants in our markets with an aggregate of approximately $4 trillion dollars in member assets under management invested in the markets.[1] You bring remarkable sophistication and great wisdom to the job of

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SEC Commissioner Offers Inside View of the Regulation Machine

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I had high expectations when I picked up Thom [Lambert’s] book on regulation shortly after it first came out several years ago.[1] Those expectations were exceeded by the clear and compelling way in which the book wrestles with the difficulties faced by regulators as they seek to design regulations that solve problems without creating larger problems in the process. As the book explains, “regulation . . . always involves trade-offs. The $64,000 question is how policymakers should proceed to ensure that they strike those trade-offs in a manner that creates as much social welfare as possible.”[2] I appreciate

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SEC Commissioner Airs Her Beef With Stakeholders

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Last time I flew to California, the skies were so clear that I was able to keep an eye on the changing landscape below all the way across the country. The vastness and great variety was striking. Having grown up in Ohio, I can attest to the fact that the magnificence of the landscape is just one of the features that makes so-called flyover country remarkably beautiful.  The wealth of talent and ingenuity in the people of the heartland is where the real beauty lies.

Indeed, one of the issues on which I am committed to working with Chairman Clayton

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