Fulfilling the Commission’s Statutory Responsibility to Respond to IAC’s Recommendations

by

Commissioner Luis A. Aguilar

U.S. Securities and Exchange Commission

Investor Advisory Committee Meeting
Washington, D.C.
January 18, 2013

I want to welcome the members of the Investor Advisory Committee to the Committee’s third in-person meeting. I also want to thank you for your continuing focus on the many issues confronting investors. Your input to the Commission is vital to highlight the initiatives that serve to benefit and protect investors, as well as to deter the Commission from undertaking initiatives that undercut or dismantle existing investor protections.

It is critical that initiatives undertaken by the Commission fulfill its mission of protecting investors. As the Investor Advisory Committee, you are the Committee focused on the needs of investors and your recommendations are critical to facilitating that the Commission is operating to fulfill its mission. Congress clearly had this in mind when it codified this Committee in Section 911 of the Dodd-Frank Act and mandated how the Committee would operate.¹

This Committee has already demonstrated that it takes its responsibilities seriously. For example, on October 12, 2012, the Committee sent the Commission seven unanimous recommendations regarding the SEC Rulemaking to Lift the Ban on General Solicitation and Advertising in Rule 506 Offerings.² I commend you for the hard work that you have undertaken, as reflected in the recommendations we received and which are available on the SEC website.

It is now incumbent on the Commission to act. As required by Section 911 of the Dodd-Frank Act, the Commission is required to “review the findings and recommendations of the Committee.”³ In particular, the statute specifies that, “each time the Committee submits a finding or recommendation to the Commission,” the Commission is required to

“… promptly issue a public statement –

(A) assessing the finding or recommendation of the Committee; and

(B) disclosing the action, if any, the Commission intends to take with respect to the finding or recommendation.”⁴

The importance of this obligation is underscored by the fact that the law requires that the Commission itself assess the Committee’s recommendations and determine how best to respond to them. This is a responsibility of the Commission – not one that has been delegated to the staff.

To that end, I look forward to the Commission issuing the required response assessing your October 2012 recommendations. It is imperative that this Committee’s recommendations be treated with the serious consideration that the law mandates.

I look forward to the Committee’s on-going efforts and to what the Committee has to say.

Thank you.

¹ See, The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Pub. L. No. 111-203, 124 Stat. 1376 (2010). Section 911 of the Dodd-Frank Act amended Title I of the Securities Exchange Act of 1934, by adding a new Section 39.

² See, Recommendations of the Investor Advisory Committee Regarding SEC Rulemaking to Lift the Ban on General Solicitation and Advertising in Rule 506 Offerings:  Efficiently Balancing Investor Protection, Capital Formation and Market Integrity, October 12, 2012, available at http://www.sec.gov/spotlight/investor-advisory-committee-2012/iac-general-solicitation-advertising-recommendations.pdf.

³ Securities Exchange Act of 1934, �(g)(1).

⁴ Securities Exchange Act of 1934, �(g)(2).

http://www.sec.gov/news/speech/2013/spch011813laa.htm