WASHINGTON Feb 25 As the U.S. Securities and
Exchange Commission gears up for an expected liberalization of
the rules that govern how companies raise capital, the
commission’s lone Democrat on Saturday urged the agency to tread
carefully and avoid unduly harming investors.
In her first speech since Republican President Donald Trump
won the White House, SEC Commissioner Kara Stein raised
concerns about possible unintended consequences that could
result if disclosure rules are whittled down.
"Capital finds it best uses when a wide range of
participants can fairly weigh relevant, reliable information,"
Stein said, in prepared remarks at the Practising Law
Institute's annual "SEC Speaks" conference.
"Does the move to opacity impact the effectiveness and
efficiency of our capital formation process? Is there sufficient
transparency or should we be considering a different
foundational principle?" Stein asked.
Trump has promised broadly that he will work to scale back
regulations that many corporations and fellow Republicans say
stifle jobs and economic growth.
Stein's comments come as the SEC waits for the U.S. Senate to
confirm Trump's pick of Jay Clayton as the agency’s new chair.
Clayton, a dealmaking attorney on Wall Street, has privately
conveyed ideas to Trump and the White House about ways to spur
As chairman, he is expected to seek ways to ease regulations
that some believe are stifling initial public offerings.
That could include rules on public company disclosure,
accounting and compliance procedures, private capital-raising,
and the paperwork filed when companies go public and register
Stein, a former staffer on the Senate Banking Committee, is
known for advocating for views on investor protection that are
cheered by progressive groups but at times have also put her at
odds with other members of the SEC.
She forcefully advocated for the SEC, the country’s top
securities regulator, to consider denying regulatory waiver
requests by banks that have repeatedly broken the law.
In her speech Saturday, Stein raised concerns about how
stock ownership is "becoming increasingly concentrated in the
hands of a small group of large institutional investors" and
whether that may "affect the willingness of companies to compete
and invest in innovation."
She also stressed the need to better understand why
companies are staying private longer and whether private firms
should have to follow "enhanced disclosure laws."
(Reporting by Sarah N. Lynch; Editing by Cynthia Osterman)