And Exchange Commission chairman jay clayton regarding the work and agenda of the s. E. C. I thank you for your willingness to appear before the committee today, mr. Clayton, your willingness to testify is essential to our oversight much the s. E. C. The mission of the s. E. C. Is to protect investors, maintain fair, orderly and sufficient markets and facilitate capital formation. It plays a Critical Role in ensuring our nation has Capital Markets that the public can have confidence and trust in. It provides information to investors so as americans prepare for their futures, they may not only have a wide variety of financial opportunities, but they also have the information necessary to make informed investment decisions. Chairman clay torngs you came before this committee a year ago and assured us you would continue to take steps to ensure that the u. S. Capital markets remain the deepest, moshgt dynamic and liquid in the world. I commend you and the s. E. C. Staff for actions taken over the past year. Actions worth mentioning include the s. E. C. s final rule package on regulation best interest which strikes the appropriate balance of increasing transparency while preserving advice on investmentrelated products. They modified the filer to reduce the number of filers. I encourage the commission to move forward quickly in a way that provides relief to all smaller reporting companies. And this summer the s. E. C. Issued a concept release seeking Public Comment on ways to harmonize the private Securities Offering exemption. I encourage the s. E. C. To revise the regulation d to allow for general solicitation and advertising by sponsors such as Angel Investor groups. The s. E. C. Should consider expanding the ability for Small Businesses to crowd fund. The definition of an accredited invest youer should be expanded and modernize to account for qualifying expertise not just simply a monday taesh threshold. Its important the s. E. C. Update the definition of a Family Office for those who meet certain threshold to be considered accredited investors. This committee has held a number of meetings during my chairmanship to discuss the appropriateness of the proxy voting process and other aspects of corporate governance. I commend the commission for its actions related to the proxy process. In august the s. E. C. Issued guidance to assist Investment Advisers in fulfilling their responsibilities when voting proxies on behalf of clients and clarified proxy vote advice provided by proxy firms generally constitutes a solicitati solicitation. After roundtables led by commissioner royceman, they have two proposals. I encourage the s. E. C. To continue moving forward with these efforts expeditiously following the comment period. This committee recently held an oversight hearing on the consolidated audit trail or c. A. T. Ive expressed concerns about what will be collected in the consolidated database and how it will be protected. The c. A. T. Plan participants wrote to the s. E. C. To request to use krmplgts amplgts t. Customer i. D. Instead of receiving and storing Social Security numbers in the c. A. T. As to store only a year of birth and firm i. D. S instead of full dates and birth and individual account numbers. Chairman clayton, you have previously expressed concerns about the information to be collected and stored in c. A. T. And stated you believe the regulatory objectives of c. A. T. Can be achieved. I encourage you to quickly process the request to use alternative approaches. Finally, the s. E. C. Has made modernization a focus this year. I look forward to hearing about your strategic hub for innovation and financial technology. And how the s. E. C. Has been engaging with initial coin offings and other cryptocurrency related matters. I look forward to receiving updates on these and other s. E. C. Initiatives including your views on when we can expect final rules in these areas. Senator brown. Thank you, mr. Chairman. Welcome, chairman clayton. Nice to see you again. Over the past few years in this committee weve seen the Trump Administration dismantle, we get a frontrow view of this, many of the protections that congress put in place after the last financial crisis, putting our Financial System and hard working families around the economy at risk. The s. E. C. Has flown under the radar but often the agenda has been the same, taking wall streets side over and over instead of standing with investors, saving for retirement or college or a downpayment. Taken together the s. E. C. s latest actions are making it harder to hold Corporate Executives accountable to investors and hard working americans. While i appreciate the Enforcement Divisions initiatives including those to protect teachers and military Service Members from fraud and misconduct and financial advice, youve done so much damage by adopting what you call regulation best interest under that rule Brokerage Firms can merely disclose but dont have to eliminate firm level conflicts. It should be simple. Investment firms need to work for the people whom they serve. Americans need to have confidence that the professionals that theyre trusting with their hardearned money are working for them not scamming them to line the firms own pockets. You could have simply followed congresss guidance in dodd frank to create a few dishary standard for brokers and advisers which would be the best way to give investors confidence that their interest comes first, but you didnt do that. Thats not the only part of dodd frank youre working to undermine. Look at the s. E. C. s proposal to amend the Whistleblower Program, one of the most Successful Programs created under dodd frank. We need brave workers to stand up to corruption and abuse when they see in their workplace Financial Companies scamming people or engaging in other illegal activity. The only way individual workers were ever able to stand up to powerful wall street firms is if we give them protection. Weve already seen a Chilling Effect from your proposal. Each year since inception of the program the number of tips has increased in some years by more by more than 10 . But after your rule proposal in 2018 introduced a cap on whistleblower awards, the number of tips declined for the first time in 2019. The proposed cap on awards raised so many alarm bells that you had to put out a statement to clarify. I know whistleblower is a dirty word nowadays to some in this town. It always is to serial law breakers. I dont see how you can make significant changes to a Successful Program like this without and understanding that the decline in tips is a result of your actions in the environment this administration has created in its talk about whistleblowers attacking rather than protecting those who speak out against abuse of power. As the s. E. C. Continues to take fewer actions and hold the largest Financial Systems accountable, we must encourage whistleblowers to identify misconduct wherever it exists and to help uncover complex frauds. The s. E. C. s reebt proposed rules on proxy advisers and shareholder proposals are often clear examples of the administration taking the side of corporate interests over americans struggling to save and invest for their future. More proposals make it difficult for shareholders to hold Corporate Executives accountable. The proxy advisers can make it harder for Institutional Investors to have timely from the firms they hire. The proposed rule would give corporations access to Investors Research before the public Retirement SystemsInvestment Fund managers and foundations who manage americans money. The s. E. C. Says the changes are necessary because of errors and inaccuracies. But youve provided scant evidence of those errors. It would give them a new tool and threaten their end pence. The overhaul of the shareholder proposal rule would make it easier for Corporate Management to silence shareholders. The amendments would stop proposals could stop proposals for votes on issues such as a disclosure of corporate political spending separating the roles of board, chair and ceo and nondiscrimination policies. Im disappointed in the directions youve taken on these rules that have for decades, for decades through president s of both parties and s. E. C. Chairs of both parties allowed investors to hold management accountable all while executives are further entrenching themselves and ignores workers and shareholders. Protecting workers hard earned savings should begin with a simple concept, putting their rights first. I hope the s. E. C. Will remember that. But over the last week over the last week, we have just last week and this week weve had nearly all the financial regulators come before this committee. Weve had the fed, the fdic, the ncua, today the s. E. C. All defending the same policies that amount to a wish list for wall street and corporate interests all afflicted with the collective amnesia about what happened in the last decade or so. The president promised to look after ordinary, hardworking people, but he and the people hes put in charge of these agencies betray these workers over and over and over again. Mr. Chair, id like to offer for the record this letter from the ohio Public Employee retirement system. Without objection. Thank you, mr. Chair. Thank you. Chairman clayton, you may make your presentation. Thank you, chairman crapo, Ranking Member brown. I want to start by thanking you for your support for the commissions mission and its people. The dedicated men and women of the commission are our most important asset. With the resources congress provided last year, weve been able to lift our hiring freeze and fill around 140 new positions with highquality individuals who i believe will serve investors well. Since becoming chairman, the interest of our longterm main Street Investors have been front of my mind. With that perspective, a perspective our staff has long held, i would like to highlight just a few aspects of our work over the past year. First, modernization has been a key avenue for advancing all three aspects of our mission. In june, the Commission Adopted a package of rules and interpretations designed to enhance the quality and transparency of the relationship our main Street Investors have with their brokerdealer or investment adviser. These measures bring legal duties and mandated disclosures in line with what a reasonable investor would expect while preserving access in both choice and cost to a variety of investment Serve Services and products. Im so grateful to our experienced and dedicated staff for bringing long overdue regulatory rationality and clarity to this important area. Were also working to respond to the substantial changes that have taken place in our markets. Including that more capital is raised in our private markets than our Public Markets and Many Companies are staying private until they are very large or not going public at all. Weve expanded key aspects of the jobs act to increase the attractiveness of our Public Markets for companies while maintaining or enhancing inve investor protections. Increasing the attractiveness of our public Capital Markets is just one side of the coin. Were also exploring whether through Fund Structures or other measures we can increase the type and quality of opportunities main Street Investors have in our private markets. I believe we should strive to ensure individual retirement portfolio can look like a wellmanaged pension fund with robust investor protection. In is a challenge but we are making progress. In many other areas, modern sdmrags efforts are making a difference for our investors and our markets. These efforts not only include rule makings but the monitoring of market function and market risk. Turning to our inspections and enforcement efforts, i want to highlight our teachers and military Service Members initiative where we have focused additional enforcement and education resources. My message here is simple. If youre ripping off teachers, Service Members or veterans, we want to catch you, punish you and get them their money back. Returning funds to harmed investors continues to be a priority and this year we returned over 1. 2 billion to harmed investors. Ive previously testified about some of the legal impediments we face in obtaining funds from bad actors in situations where fraud is well concealed, such as a ponzi scheme. I very much appreciate the bipartisan work in congress to address these challenges and welcome the opportunity to continue working with you to ensure that defrauded investors can get their money back. Finally, i note we have substantially increased our efforts to engage directly with investors, entrepreneurs and an array of market participants. In particular we have allocated resources to our Retail Investors and entrepreneurs that live between the coasts. Thank you for the opportunity to testify today and i look forward to your question. Thank you very much. Chairman clayton, as i highlighted in my opening remarks, the s. E. C. Has taken a number of critical steps to modernize the guide anz and rules surrounding proxy advice, the proxy process and shareholder proposals. This committee has held multiple hearings and the s. E. C. Has conducted roundtables on these issues. These rules have not been reviewed by the commission in decades and i commend the s. E. C. For taking these thoughtful actions on the staffs expertise. Based on the staffs expertise to address changes in the markets that have occurred. In your public remarks, you mentioned you expect the commission will address proximating and universal proxy. When can we expect to see actions to modernize this proxy process . Chairman crapo, weve taken if its on the nearterm agenda, we intend to get it done within the year. Those items are on the agenda. Staff is working on them. And i would hope we would be able to move them forward in the coming year. Well, thank you. Again, i appreciate the attention you have given it and encourage your strong focus on it to bring it to completion. Moving to a different issue. Facebook announced a plan to introduce a new cryptocurrency called libra. While s. E. C. Is one of the jurisdictions over libra, can you explain how other regulators are working to be responsive and innovative to marketplace trends such as cryptocurrency . Sure. I appreciate the question and the question highlights what happened with that announcement. Im not going to speak about the particular product. Its not appropriate for me to do so. But the announcement was a focal point for regulators of different types to recognize the digitization and digitization of the plumbing and other financial aspects, including payment transfers. It is coming. The ill just say the natural economic forces that it unleashes, taking fat out of the system, for lack much a better term. Its happening. Now, we have to recognize thats happening. Recognize our mission, safety and soundness, investor protection, fair markets and ensure that as that digitization takes place, were being true to those principles. But we should not be fighting that digitization. Because, you know, if we fight it, it will go around us. Well, thank you. That mirrors my feelings on it. I assume when you say its coming sorry, senator. Its here. Its here. I see. Its here. Yeah, it is here. And as i have said many times, again, leighing aside the specific proposal of libra, the issue is one which the United States and its allies and friends in the World Community need to lead on and to set the rules of the road on rather than to let it come and develop on its own through other jurisdictions who are not as friendly to the United States and, frankly, through other currencies than the u. S. Dollar. So i encourage you and the other regulators to focus on this carefully. One of the first decisions the United States has to make is who, among our regulators, are those who regulate and how will we regulate, as well as the specifics of how we set the rules of the road. I encourage you to pay very close and careful attention to this. Finally the s. E. C. Concept released seeking Public Comment on ways to harmonize the private securities option exemption is a positive step and includes many key reforms. What are the next steps and timeline for the s. E. C. To act . Well, the next steps that are on our agenda, a proposal around the accredited investor definition. In your opening remarks you highlighted one of the issues with the accredited investor definition, which is its a binary definition based on wealth. Ill say it simply. There are a number of people who have the sophisticated able to assess investments who may not meet those wealth thresholds and we should do a better job identifying them. That said, the private market has risks that are significant compared to cognizant of that. Thank you. Senator brown. Mr. Clayton, for a number of years wells Fargo Management has recommended voting against, asking the company to separate the role of chairman and ceo, a. The amendments you proposed to eliminate simple proposals like this would have cut off wells fargo investors after four years of doing that, even though in subsequent years is received support from 37 of shareholders. We know separating the chairman and ceo is a sensible proposal because after wells fargo found itself mired in scandal. How do you justify a proposal like you made that could limit shareholders from continuing to push for sensible governance reforms . Senator brown, the question that youre asking is after a shareholder proposal has been put on the proxy and sent to all shareholders to vote on and garnered less than majority support, substantially less, how long does it stay on the proxy . Right now, the thresholds effectively if you get more than 10 of the vote, you can keep it on the proxy indefinitely. That rule has not been changed since the late 50s, early 60s, a combination of rules, at a time when communications and shareholder engagement were very different. Our proposal looks at increasing those thresholds. Weve backtested them. Still, if you were able to garner more than one in four shareholders in favor of your proposal, the proposal would be able to stay on the proxy. Well, you say that, sta sounds good but commissioner jacksons office studied data from a decade and a half, 2004 to 2018, he found the proposed rules would exclude 35 of the rules for 50 of board chair, and 40 of political spending disclosure proposals. These are all areas where corporation need to be doing better. Shareholders deserve it. I hope you think this through. Let me talk for a moment about whistleblowers. You tried to recently tried to clarify your proposal to amend the Whistleblower Program in saying it would not create a cap on awards. Can you commit that the final rule will be consistent with statutory requirements and not commit a cap . Absolutely. And any chashg sfwlags of our proposal as a cap is completely misguided. Completely misreads our rules. The statutory mandate is for the commission to decide between 10 and 40 how much the whistleblower is entitled to. I can tell you what our proposal was intended to do was to make it clear how we make those decisions particularly at the top end and bottom end of the spectrum. I believe in transparency. And how those decisions are made. And i believe Congress Gave the commission the discretion between those to make the decisions. And i want to say personally, im not speaking for the rest of the members of the commission, i think the program has been extremely beneficial to investors and i support it. Well, again, you say you support it. I believe you that you do, but ive also seen the proposal you made has had a Chilling Effect. Weve seen the numbers change in the last year. When people mischaracterize things, they have a Chilling Effect. I have to step in and clarify them, which is what i did. I guess youre arguing the Chilling Effect is gone because you clarified it . I hope so. And we you cited the 5,000 number the 5,000 whistleblower tip number, which was slightly down from last year after a long upturn but our tips, complaints and referrals, which is people identifying issues for us, we had other 17,000 of those and we i think we investigate them we target investigating them, initially within the first week theyve received. Let me be clear, anybody who sees a problem, let us know. Let me just close, mr. Chairman, with a comment from senator grassley. He said in establishing the whistleblower award program, congress was not concerned about a award figure being too big. If anything, the legislative history Shows Congress was more concerned about potential whistleblower awards being too stingy. Let me do one more well, go ahead. I yield back. Thank you. Senator cotton. Mr. Clayton, i want to talk today about the collapse of we work. That company just laid off 2,400 workers right at christmas, 20 of its workforce. Due almost entirely to the incompetence, greed. Bloomberg reported that the s. E. C. Was investigating we work and mr. Newman for fraud and other securities violations. Is the s. E. C. Investigating mr. Newman . We do not comment on whether we are investigating or not investigating. All right. I thought that might be your answer so let me put it a different way. Hypothetically speaking, if a Real Estate Company was going public and the ceos wife and nephew have been given positions named chief brand and impact officer and head of wellness, which kind of sounds like phoney, madeup jobs to me, might that be something that the s. E. C. s Enforcement Division would look into . The ceo trademarked a common word like we and sold it for 6 million, might that be of concern to the s. E. C. . Those types of transactions are required to be disclosed. One final hypothetical. If the ceo of that company had credibly been accused of transporting illegal jets in a private jet across International Boundaries and spending millions of tlarz of this companys money on lavish parties with famous deejays and don julio tequila, would that be responsible governance . Let me say this. Our Disclosure Requirements around the back ground and character and activities of directors and officers of Public Companies require disclosure that would enable people to make those types of judgments. Let me say this about the s. E. C. s attorneys. I want to commend you for your work in the we work initial public offering. They filed a prospecticeespectu nine months for review with you before it went public, and your lawyers caught many discrepancies in it. For instance, they claimed that they could assume a 100 occupancy rate of all their buildings or some financial metrics known as contribution margin or Community Adjusted ebit, whatever that means. Its good the s. E. C. Caught this. Its unfortunate they caught it at the last minute. We need a system that can catch it earlier before so many workers are injured. All those things are things adam newman did as a matter of record or accused of having been done. One of them, transporting drugs across boundary, i hope is being investigated and i hope the Enforcement Division at s. E. C. Is investigating newman. He received a 1. 7 billion payday to walk away from the smoking rubble of his company. As he preferred to call, it not a company, but a state of consciousness. He was able to extract that payout because the corporate government structure gave him ten votes per share. A kind of super voting stock that enabled him to hold his company hostage until the other investors paid him just to go away and stop destroying its value. Hes even on a fouryear consulting contract at 185 million in case they need tips on deejays or other kinds of tequila. 1 billion is a lot of money for any executive. But certainly to scandal for someone who presided over the ruin of his company. Null leadership requires strong character and accountability and that includes corporate leadership. Thats what was absent in this case with adam newman and what he did to the workers at his company. Aided and abetted by some of wall streets biggest banks. Polls show younger americans have doubts about capitalism and are open to socialism, for good reason, given the brutality and poverty socialism inflicts on its people. But people like adam newman and what he did to we work is the reason people in america are open to social impeachment. Senator reed. Im tempted to ask you to respond to senator cottons question. Chairman, as several of my colleagues have indicated, you proposed two major rules. One with respect to proxy adviser firms and the other related to shareholder proposals. These are rather complicated rules. And i presume youre going to receive significant numbers of letters of comment that have to be clearly analyzed. And i would ask for deliberation. I think also, too, just looking in the council of institution investigators have conducted a study that since 2016 the median number of days that are s. E. C. Rule has been promulgated and then adopted is 416 days. Thats more than a year. And those are for some that were rather innocuous rules. What i would ask, you be very careful, very deliberate, particularly analyzing the comments coming in and do that in a way excuse me, its 413 days. I want to be correct. Very, very careful in review of these rules. The consequences will be significant. Can we get that commitment . Yes. And the entity you mentioned, i believe i have on my calendar for tomorrow. We are open to engagement on this. I want to hear from people of all types. Very good. Let me turn now to the issue of the status of some big accounting firms. That would be conducted by the Public Company accounting oversight board. The s. E. C. Fines numerous order professionals at that firm cheated on internal training many exams by sharing answers and manipulating test results. In addition to the finding against the firm, a principal in the firm, the secondranking individual, was convicted of wire fraud and other crimes. These proceedings suggest there may be problems, as i said, legal and cultural, particularly big accounting. On top of that, the Financial Times last month did a very lengthy article about the behavior in these firms, of which im sure youre aware of. You read it, i presume . In which whistleblower, that term arises again, came forward with experiences of harassment, bullying, discrimination. It was a very toxic article and very unflattering to the industry. So, first, do you see these issues as significant and, second, and i hope you do, what two or three specific actions do you anticipate taking this year with respect to the issues . So yes, senator, i do consider them very significant. Highquality Financial Reporting that people can rely on is the bedrock much our Capital Market system. And Audit Quality that people can count on Audit Quality, is essential to that. With our office of chief accountant, we are engaged on a regular basis with these firms on efforts to approve Audit Quality. And through the pcaob. And i want to highlight you mentioned the Financial Times article. Its not just a domestic issue. Its an international issue. We have asked our chief accountant to take on additional role as head of the monitoring group, which is trying to ensure highquality Audit Standards across the globe. U. S. Investors should understand that Audit Quality is not uniform. And, in fact, i dont believe that it is as high quality in many places outside the United States as it is here. The only thing to try and do there is lift it and were trying to do that. So, i can tell you that were engaged on a number of fronts on improving Audit Quality. Thank you, mr. Chairman. Thank you. Thank you, senator reed. Senator kennedy. Thank you, mr. Chairman. 2k3w78, mr. Chairman. I want to talk to you about the Public Accounting oversight board. I think the acronym is pcaob. Yes. Whats that board do . Well, they oversee the pcaob that really has three functions. Standard setting, inspections and enforcement. Basically, they they review the audits of Public Companies, is that right . Yes. And other and broker dealers. Essentially Public Companies. To make sure the audits are accurate and fair and honest. We have about 156 companies from our friends in china on u. S. Exchanges, as i appreciate it. Big market cap. About 1. 2 trillion. How many of those companies, if you know, are owned by the Chinese Government . Trying to come up with a precise number to that question would be a fools errand. But i i wont try and trick you. No, ill say i am certain that the Chinese Government has a Significant Interest in many of those companies. Direct or indirect. Yeah. The stateowned companies are under president xi jinping are becoming more and more prominent, and privately owned companies. How many of those Chinese Companies are complying with the work of how many of the audits of those Chinese Companies are working with the pcaob to let the pcaob review their audits . The pcaob requests work papers from the companies that it audits. And with respect to those companies, access to those work papers has generally not been available. Right. So basically our friends in china are Listing Companies on american exchanges. They have Companies Audit their companies. But our pcaab is not able to review the audits because the Companies Say no, is that right . Thats correct. And its a problem. What are we doing about it . Well, we are trying to remedy that directly. Recently because remedying that directly has taken, in my view, too long, the chairman of the pcaob and i sat down with the heads of our big four audit firms, who are generally involved through affiliates in those audits, to ask what theyre doing to ensure and give us comfort that the audit work theyre doing is of the same quality as the audit work in other jurisdictions. Has that helped . I dont know yet. Thats not a onetime dialogue. I expect to engage with them again. And i wanted to make sure that they understood how important this is so engaging at the level of my office and the head of the pcaob. I mean, we want to encourage companies from all over the world, including but not limited to china, to raise capital in the United States because our markets are very efficient. But theres a reason that god made the s. E. C. And the pcaob. And that is to make sure that these companies, these foreign companies, when theyre audited, use Auditing Companies that are telling American People and other investors the truth. And the Chinese Companies dont seem to be cooperating. And it doesnt seem to be getting better. So a lot of investors, including but not limited to american investors, are basically flying blind. And, of course, weve had trouble in the past with Auditing Companies that dont really do a proper audit. Ive got a bill that id like you to take a look at called the Holding ForeignCompanies Accountable act. It basically says that a company has three years to cooperate with our pcaob. And after three years, if they if they dont allow us to review the audits and answer our questions, that their delisted. Do you think that would be effective . So, there is one issue. And i i will look at it. Just because a company is delisted doesnt mean u. S. Investors will not continue to invest in it. Thats true. Let me put it another way. It will get the attention of the foreign companies, will it not . It will. It will get the attention of investors and i think those things are valuable. Not all of them but many of them will be born again and start complying, correct . I hope so. Okay. Thank you, mr. Chairman. Senator menendez. Thank you, mr. Chairman clayton. Im increasingly concerned about the ability of foreign actors to manipulate u. S. Companies through their investments, particularly in the media and technology sectors. In 2017 the u. S. China Economic and Security Review Commission highlighted this issue when it recommended congress modify s. E. C. Regulations to require greater tans parency requiring chinese goth of Media Outlets and the clear labeling of media content sponsored by the Chinese Government. I offered a provision in the modernization act to make sure they are requiring foreign stateowned companies in their attempts to acquire u. S. Companies. But the s. E. C. Also has a role to play. Section d of the Securities Exchange act requires investors who become the Beneficial Owners of more than 5 of an issuers equities security to report certain identifying information to the s. E. C. But if undisclosed or disclosed without sufficient information such ownership stakes could undermine the free flow of information to the American People. So my question is, how does the s. E. C. Monitor equity markets to ensure that Foreign Investors are not accumulating significant shares in Public Companies, especially in the media and technology sectors, without filing the requisite disclosures . Senator menendez, your question is a really good one. Its the only ones i ever ask here. Just kidding. Got to have fun here. Occasionally weve got to have fun. Look no, absolutely. Control over a Public Company is something our markets and investors need to know about. The 13 dg rules that essentially trigger over 5 not just for i think are extremely important to our investors. We do try to monitor and look for violations of those rules. But i want you to know, and im not going to get into too much detail, our ability to track who from the u. S. Is u. S. Citizens who are owning companies, its pretty its very robust. Sometimes when investments occur through overseas accounts, its not as robust. And thats what im concerned about. I appreciate your acknowledge of that. Would it be fair to say you dont have the ability to independently verify the information in a 13d filing or, more importantly, whether a foreign entity should have filed a 13d or failed to comply with the law . Im not going to go as far to say we dont have the ability. Im looking to enhance our ability. Let me ask you that. Given the need for the American Public to know if their media is being funded by Foreign Investors, would you agree the s. E. C. Should monitor how wrongdoing is concentrated by sector . Im not sure i follow. So, by looking where you find wrongdoing, wouldnt it be of value to know which sectors those violations are taking place . Oh, sure. People in our Enforcement Division, theyre very good at noticing sectorspecific or let me ask you this. When you do find a suspected 13d violation, how does the s. E. C. Enforce it and what penalties are assessed against persons or entities found to have broken the law . I can think of some episodic ones off the top of my head. But to give you a specific answer is difficult. I can get back to you on that. Weve seen violations in different contexts and the takeover context is different from others. Let me give you an example. There is im aware of from public filings of a large Radio Station network in the country. That ultimately found that in fact, Foreign Ownership because of litigation they didnt know who these creditors were, but ultimately through litigation found Foreign Ownership exceeded the cap. They brought that to the attention of the fcc under their due diligence. Then there should have been a 13d filing by this entity, but there was. And so the question is in circumstances like that now, here you have a foreign entity, a group of creditors abroad who are now owning in excess of the percentage permitted under the s. E. C. Who didnt make a 13d filing, which is the only way a company would know whether or not they have that Foreign Ownership existing in their publicly traded stocks, and so the question is, what happens to that entity . If were to have teeth at the end of the day to this 13d and to try to protect ourselves against Foreign Ownership that exceeds the applicable allowable entity under the law, we need to have some teeth in the 13d process. I really hope as chair youll look at that because it comes to the essence of information that we are all making decisions on based on Public Information of our medias, but when its controlled by a foreign entity, you have to wonder whether or not its just an investment or whether its an attempt to ultimately make influences. Understood. Thank you. Senator tillis. Thank you, mr. Chair. Mr. Clayton, thank you for being here. I think you and your team are doing a great job. I wanted to touch on something you and i have had a discussion on, and thats some of the proxy adviser firm rules. I know you all have put out amendments, i think on november 5th. I appreciate you all are taking this seriously, moving forward with guidance and now these potential amendments. Im particularly just interested in making sure that the proposed rules give Impact Companies an opportunity to consult with proxy advisers and address any social errors or conflicts of interest. But as youre looking forward, how do you think the proposed rule actually can help ensure that the proxy firms continue to play an Important Role in the marketplace and also balance that against some of the issues you and i have talked about against errors and conflicts of interest . Let me be clear. Proxy Advisory Firms do play an Important Role. Data. Its very ee fishgt to crunch the data on a collective basis and provide that information. They can provide other services. What the proposals are looking at is really three things. One is to make it clear that the solicitation antifraud rules apply. If youre materially misleading statements or something, i think we should address. Conflict disclosure. If you have conflicts to the extent they would be material to the investor, you should disclose them. And then the last one is one you and, frankly, a more tricky one is trying to improve the accuracy and completeness of the information investors from all areas have on which to make a decision. I think all of those can be accomplished in our framework. We do it in many other areas, ensuring that, you know, we have transparency around conflicts and the andyfraud rules apply to people that have significant influence in our marketplace and trying to improve accuracy. Thats what were striving for and we welcome comments. Thank you. Are you looking beyond the rules you all proposed on november 5th . Are you looking at other areas of rulemaking moving forward . Automatic voting . Any other priorities . Senator, i cant say that beyond that, any specifics in the area of voting other than what i mentioned, which is the plumbing, trying to improve our our plumbing is fairly archaic in the proxy area. And universal proxy, i think theres been enough debate about that where we can move forward with a proposal. Just one other thing because i have heard some concerns over litigation and how it may increase in this space. And have you looked at this . You have any things youd be looking at at the s. E. C. . Happy to hear from people who have a concern about an increase in litigation. To be clear, the proposal makes it clear that theres no new right of action or private right of action created by the proposal. Another area i want to touch because i know in here weve had some of our members, and i think some of the folks on the commission have expressed some concern about buybacks and potentially stock buybacks and potentially placing limits on that. I, for one, think its a business trying to figure out the best way to deploy its capital. Would any kind of restrictions or additional restrictions on buybacks, what would the consequences be to mom and pop shops or i should say mom and pop investors over time if we limit that optimization or deployment capital, what could it possibly have what negative impact could it have on the average investor . Its difficult to say with any degree of precision. I agree with the premise of your question, which is, Capital Allocation decisions, whether to buy a company, whether to invest in a new line, whether to pay a dividend or buy back a stock. Those are board of director decisions, understanding the id yoe sink ra id yoe sink racys of the company and what they believe is best for the longterm of the company. To put a point on it, im not qualified to make that decision for them. I agree. Thank you. Not that you wouldnt be in the boardroom, but in your current capacity, i dont think its appropriate in your current capacity. Thank you very much. Senator smith. Thank you, chair crapo. Hello again, nice to see you again, mr. Clayton. I would like to follow up on the line of questioning that senator brown and senator reed started around these shareholder proposal rules. Last month as the s. E. C. Voted on party lines to adopt these two rules that i think will make it harder for investors to seek votes on shareholder proposals, so im concerned about this. And i wanted to ask you about something specific to this. In your statement when the Commission Approved these restrictiondr restrictio restrictions, you cited several Public Comment letters. You said something to the effect of how these letters struck you the most because they came from longterm main Street Investors including an army veteran, police officer, teacher and Public Servant and a mom. And this is all great except, of course, it turns out that theres some question about the validity of these comments. According to bloomberg news, several of the letters you cited werent actually main Street Investors that system of the letters that you cited were not main Street Investors at all. They did an investigation, and the retired teacher said she never wrote the letter, and the military vets were the brother and cousin of this virginia advocacy group. Bloomberg said that one of the retirees did not write the letter bearing his name, and the Public Servant said she allowed a Public Affairs firm to use her name without knowing what it is about. So i wanted to ask you a little bit about this, and given that you have cited these letters and if it has an effect on whether you think that this is a good idea . Well, a couple of things. We are having an investigation done of this issue, and i will leave the specifics of this. I am very interested in hearing from the individual investors and in particular direct and not filtered bigroup, and one of the reasons that we have conducted a large number of town hallsb a s and did so in connec with directing with it, you will get a lot of good information. I agree with that. So during this comment period, i encourage as many individual investors as they can to share their thoughts with us, and we will be doing the town halls where they can speak directly to me. So you are investigating the sham let frers the pters from t here to see what happened and how they were received . Well, not i, but our group is contacting the general counsel and the council of the legal department. Do you think that is best of i wont get into that here, because the process is open process to extent that things happen. I dont think that i will leave it at that. And we will see what happens with the investigation. I am certainly glad to know that you are investigating this, and that is important, and if you are basing the decision based on what to do with the comments and the public interactions that are fueled by corporate advocacy groups i think is a problem. That is why we have the open apa process and comment period. Okay. Let me ask you another question, because i serve on the congressional commodity commission. In august, the Commodities Group agreed to settle allegations that the food giant kraft had manipulated the wheat market, and the settlement they approved was unique, because it had no factual findings or conclusionings of law, and prevented the commission from making any public statements about the settlement. This is very concerning to me, because i think that u. S. Citizens should have the right to know what federal agencies are doing when they are settling cases. So my question to you is given this is this . You are asking an open ended question, but i am not aware of any situation, and im not sure that i can carve out any kind of National Security or intelligence area of what i am saying, and as far as the ordinary commercial actors, and im not aware of any. Okay. Okay. That is a great concern to me as well. So, thank you. Thank you, mr. Chairman. Thank you, senator moran. Thank you, and thank you Ranking Member. Thank you, mr. Chairman, for joining us, and we would like to thank you for your leadership of the agenda that you have helped to accelerate over the last year. So i also approach yeciate the openness that we have shared in the offices and as members of this committee. I do want to raise a concern about what i have seen in the regulation by enforcement referred. To and at least one commissioner recently had a problem affecting the investors and it should quote promulgate a rule, and put into the rule before it hurts investors, and end quote. And provide industries with appropriate notice what the s. E. C. Expects from them. Do you have any comment on that . As i said, i have seen the challenges that are if you are seeing widespread conduct that is problematic. There is no reason to provide anything other than a reasonable person could clund. And my view is the guidance and i realize it is complicated. One of the things that we talked about was the share cloud initiative, and we were all of the way in looking at this spectrum, and i think that our enforcement and Inspections Division understands that, and so to make the appropriate selection of how to pursue conduct that needs to improve. Mr. Chairman, in that regard i and so looking at the s. E. C. Staff pointing to the risk alert that the industry was given sufficient notice of what the s. E. C. Expects from the regulated firms and disclosures such as the use of may versus will. However, i understand that the initiative has penalized the firms for activity back to 2001 in addition to the notice that you are claiming that occurred. Is there something here that i should be worried about . There is nothing in here that you should be worried about, but the principles that you are articulating is something that we should be concerned about. We should not be in the business of gotcha, but we need to be in the business of enforcement of our laws. And if the commission feels some way about it, we, the commission, we should articulate it and not rely on the staff guidance and if there is a change in the law, that should come from the commission. I fully support the initiatives to provide important protections for the Retail Investors, and that is not really the issue. I dont know what due process means in the world, but notice is something that is included in the due process, and in order to one, i hope that you have the ability to regulate, and if they knew what the position of the s. E. C. Was, they would comply voluntarily, and that is a positive in and of itself, and for there to occur something that was seemingly no notice denies the ability to voluntarily comply, and eliminates the opportunity for them to have quote due process. Understood. Thank you. Chairman, thank you. Senator contez masto. Thank you. And chairman clayton, thank you for appearing here today. I appreciate it. I wanted to talk a little bit about my concern and what can be done and what you are doing to prohibit the requests, or the quest from clients and i wanted to give you an example, because i sent out a finra for brokered deal for other Financial Advisers to look at money from their clients. And there is with the former attorney general stating that there is often fraud wit. A fraud associated with it. I understand with some familiar relationships, but there could be fraud associated with it. So my question is twofold, do you think that family members should prohibit the family members from receiving the bequeaths to the family members. On the contours, i will not comment on it, but on the area of the elderly, and many of whom are in a position where they may have diminished capacity or not have support, and we are very concern about that. Yeah. Let me just say that the fact pattern that you posit of the trusted adviser receiving an inheritance is something that strikes me, you know, very difficult of how that could happen, and it worries me. And what specifically were we doing about it. We were doing a lot at the s. E. C. To recognize that many of the investors are getting older. And we need to deal with that fact, including implementing the senior safe act which allows the brokered dealers to hold off on distributing funds if they think that something inappropriate is going on, but i am happy to engage with you further on this issue. I would appreciate that, because it is an issue that needs to be address and i look forward to what is being done to address the issue. I also appreciate your attention to preventing Retail Investors from falling victim to fraud. Finra has made it more difficult for the Brokerage Firms top orate, and along with my colleague, we have sent a letter to finra to expel those with a history of fraud. I understand that it is in the beginning and ready to be passed to the s. E. C. For you have to take a look at. And my question is that if you will assure that letter 411 is that unscrupulous Financial Professionals cant no continue to operate. And then separately is when is the s. E. C. Going to approve or when do you anticipate taking a look at the rule and approving it or a comment with respect to 4111 . Well, let me say generally, that our view is that it is a privilege to work in the securities market, and it is a privilege that you could lose and should lose if you misbehave. So i dont want to prejudge, because i have not seen the text of the rule, but i am long supportive of the concepts in the rule, and including that lets put it this way. If you are going to hire somebody with a history the registration that finra imposes should require that you are taking more risks than somebody who doesnt. So, also, let me appreciate the concern around Digital Currency, and this is an area with the chairman, i am paying close attention to, and i know that with your comment, you said that it is here and we cant go around it. I agree. And so i am hopeful that we as we are moving forward that you are putting resources to address and looking at this, and what can be done, and at the same time coming back to congress, and talking to us about what we can do to really be prepared with the future of Digital Currency, because it is coming, and i think that we need to be prepared for it. Thank you. I do have one question in regar seen that crypto currency has been subjected to investors, but yet i saw that according to a article in the wall street journal, they have failed to reimburse people who had expired crypto currency. And so do you have enough enforcement within the division to enforce these issues . All right. Let me summarize what can happen with the settlements. And we can structure them, and we are trying to structure them in the way to get the most money back to investors over time. And sometimes that means allow ing payments over time, and sometimes they just fail, because they were not Good Companies to start with. I think that some of the paradigm applies to the situations that you, that you are identifying early, some of them. In terms of the resources, look it, i think that we can do our job. And when i first took this job, i didnt know what i would do with significant additional resource, and now i feel better to have Additional Resources in some the emerging area, and we can put them to good use, but we can do our job. That is how i feel about it. Thank you. Chairman, thank you. Thank you. Senator kramer. Thank you, mr. Chairman, and mr. Clayton for being with us, and your candor. I would like to talk about the trail of the lot that is collecting information on every client of the Brokerage Companies that should by my calculate impact over 100 million client, and that is in and of itself that much data and Sensitive Information compiled in one place has the challenges, but in addition to that the sros as i understand it with some 3,000 people, and 24 organizations will have the ability not only to access it, but download it in bulk into their systems. I didnt used to be paranoid, but i have come to a point where institutions can secure that much data from this broad application of this consumes me. I would love for you to help me feel more comfortable with what the s. E. C. Is doing to protect against attacks and cyber challenges with that kind of a risk. The cat is good example of how we should look at a lot of the large data projects. I agree with your concern. And the question is, the fundamental question is not what data would we like to have, but what data do we need to do to job. We are going through a process with the sros and others and we could significantly limit speaking for myself, and the phonebook information from other individuals should allow us to do our job, and have the cat system function like it is. And that is the risk because the data is not as sensitive and the other side of the coin is what kind of security protections do you put in place, and how do you ensure that the security protections can evolve as the threats are evolving, and that is a general summary, and we are working on reducing the sensitive data, and ensuring that folks have en sight ininsi and we continue to work with the security incentives. And drilling down, i understand that the firms are required to sign the c. A. T. Agreement which is going to shield the sros from liability, and any time we start to yielding institutions or individuals from liability, i ask why. Why is that necessary . If the safeguards are in place, you know, it is only going to add to my insecurity if you will. From my point of view, mr. Chairman, i believe it is highly risky, and a breach is going to eventually happen, and i hope that the s. E. C. , that, you know, they can prevent that obviously. I am aware of the issue of allocation around the potential of liability, and i am meeting tomorrow with representatives of the sro community, and what i will call the Dealer Community to discuss the issue. Appreciate that. Busy day tomorrow. Sounds like it. Senator shotz. Thank you mr. Clayton for being here, and i wanted to ask you about the commissions engagement of the Climate Task Force on Financial Disclosure and how are you working with the task force . So, we are working with let me try this. There are international bodies, and fsb and i will put the eu there, because we are working with all of them on this issue, because the market disclosures of these issues are global issues and not just domestic issues. So i would mediumlight to heavily engaged as compared to other issues. Specifically, what are you doing with them . Me, specifically . The commission. Working on the reports and the proposals, but it is not just that, because i think that it goes beyond that. I have recently met with the ambassador from the eu, and randy kwarle lequarrels to brin useful information to the market. You dont think that we are there yet . It is hard. Yeah, i think that it is hard. Are you actively enforcing the 2010 guidancen disclosure . If what you mean by actively enforcing is if we are actively Monitoring Companies to see if they are following it, and to the extent they are not addressing that, the answer is a clear yes. I think that one way that you could more actively enforce it is to put the issuers on notice, and this is something that the division of the Corporate Finance will be looking into . Well, let me say that we examine for this. When we examine the filings. So i think that people will listen more carefully if you say that you examine for this. We have been looking for this. And the number of categories that i have seen is politics. We are mostly at in terms of the commission to be through that part, and then we have to implement platforms and across t planet so when you are comparing, you are comparing apples to apples, and other part of it is whether or not you as an agency are leading versus sort of waiting for tcfd and others to see how things play out. So in the ecosystem that is working on this, would you consider the s. E. C. A leader or follower or participant, and where do you put yourself in this . Definitely a participant, and i would say a leader through that decision useful lenses. Including trying to articulate ways that we can use the information that is being generated to further our what i would say is monitoring and oversight. And you know that there is some carbon exploration, and some organizations under your jurs kiisdictions are making disclosures, and then a separate less informed disclosure as it relates to climate risk to you. Do you consider it appropriate for the commission to look at the disclosures and incorporate into your atrisk analysis . Back to the question of the we examine for this, but not just this area, but we look at the companies required disclosure, and the 10k annual report, and see what they are saying in other places, and ask the companies that you are reconciling these for us to the extent that they are not looking consiste consistent, because that is something that we do. You think that you can be useful in the terms of being decisionuseful, but on of the things is that you have different ways to climaterelated risk. Do you believe that the s. E. C. Can lead or develop a more consistent thorough disclosure for Climate Risks . Let me say this. I think that we have a great deal of expertise in disclosing in a way that investors can use it. We are trying to bring it to all areas that we do including this. Thank you. Senator rounds. Thank you, mr. Chairman. Mr. Chairman, good morning. I wanted to follow up a little bit on the issue of the consolidated audit trail. It seems to me that there is going to be modifications, or at least we could expect modifications based on the data that is collected, because there is very high probable of breaches, and just as an exampleple to have an employee to take home a notepad with data on it. Any part of a employee way to have access and then lose it. These are the ways to have data and then it is lost, and we are look at it from a lot of entities to one location which is making for the prime opportunity for nefarious activities. My question is number one, when we start to talk about the limitation of liability as mr. Kramer has suggested that it is bearing to mind that somebody has the loss. The question is then that do you believe as the rules as they are laid out, and the guidelines that we are seeing are some limitations for some, and are these fair to set up to be limiting the liability, and then so far as evaluating the limitations that are currently being put into place today . Yeah, the short answer is yes. Do you want the longer answer . Yes. The longer answer is that your premise is right, and when you try to allocate the responsibility, you try to allocate it to the people who can best adjust the risk or are responsible for it. It is something that is in my mind as i am looking at these things. I wanted to bring attention, because i believe that it is a serious issue, and you dont need a consolidated audit trail, and if you want to go that way, it has to be something that the data has to be kept in a secure entity. And if you cant do that, and perhaps we can, and it seems that you are looking at a limited amount of data, and along that line, making certain that where the possibility of the risk is, the blame does not leave that location. And so there is a responsibility and the authority which is combined for the protection of the risk. Understood. Okay. Now i wanted to go back, because i have been listening with interest, because i wanted to give you an opportunity to perhaps clarify the suggestion that libre might be ridiculous, and i wanted to go into this with the following, and i wonder if there are folks who wonder if libre was an attempt to do something something differediff walk away, and say that the product is ridiculous, and then i think that we are picking the winners and the losers. Let me jump in because i am not passing judgment on anybody. If my comments were to say that any product is ridiculous or not, i will tell you that i dont know. I do know that there is a great deal of, shall i say friction in the marketplace that digitization can reduce. We have to be sure that as that happens, it is across the financial regulatory community, and in ours, the investor protection, and the sufficient banking and soundness, and et cetera. We cant lose sight of those things because of the new technology, but we also cant ensure on the Old Technology to ensure those things. You are looking at the definitions that come from a 90yearold law. And so maybe i can cut to the chase on it. Do you delineate or see a difference of the separation of the crypto currency and perhaps a Digital Currency, and do you see this is the separating issue that you have a Digital Currency today, and then in some respects backed by sovereign versus a crypto that is not backed that way . You have an obligation, i guess in this case to where you are the regulator, you would be looking at both. Let me say this. There is a lot going on there, because it is complicated. We have a great deal of digitization in the Financial System, and i do believe that there is a difference of the sovereignbacked medium of exchange, and privatebacked medium of exchange. I agree, and i wanted to make sure that you had the tools take a look at them differently if that is the charge. I have heard you and appreciate the extent to which we should have something and in contact with this committee, i agree. Thank you. Senator van holland. First of all, i wanted to add that senator leahy said that the Chinese Companies who trade on the current industry seem to have the same which is common sense. And we also have the timing of the insider share selling and the stock buybacks, and since we last discussed that, the commissioner jackson and others have presented more evidence that the timing is more than a coincidence and they may be batting at the timing, and the disappointment of the shareholders. I am disappointed that you and the commission have not moved more rapidly to investigate this. So i am disappointed that instead of you are focused on strengthening the hand of the strong ceos and corporation, at the expense of their shareholders in many cases with the proxy regulation that you have proposed. This is an answer in search of the problem. You described the plumbing, and trying to figure that out, and i agree with the conflict of interest divisions, but you are saying that i if i got out to hire an independent proxy adviser to give me recommendations to me about how i should vote with my shares, then the proxy adviser has to go to the company and the ceos to get them to essentially comment on them, and that i have a ns t have a number of reviews. So i dont need a nanny. I can do it myself. And so what troubled me is that you have looked at this as a concern of the main Street Investors. When you rolled it out, you meant to create the impression that a lot of the main Street Investors care about. I have been in the committee, and the house and the senate, and i have never had a main street investor come up to say that this is a concern of theirs, and if so, then i look forward to it. But you were duped when you rolled out that statement. Senator smith asked you about that, but in addition to the fake letters that you cited a fake teacher who says that apparently now that she didnt write the letter. There were a number of letters that were orchestrated by 60plus. For those who have been around here, we know what 60plus is, it is a dark money, and fund group that corporations use for messaging. They dont have to disclose the donor, and it is great, because make it sound that they are taking care of the seniors, and some of them do incorporate shefrron and exron, and so are you aware of the heads well, i was not familiar with the group of 60plus. Are you aware that the couple that you cited is the mother and the father of the head of the 60plus . I am now because you told me. Are you aware that they had no conneng shun with the letter . No. Are you aware that the military veterans that you cited are the brother and chairman of the 60plus. If you say this. If a company had done, this w we could go after them for misleading statements. And you did not intend to do that, you were the vehicle for that. And so you were the vehicle for that as you tried to roll it out with the patina of the main Street Investors, and wasnt that your intent . I believe with the colloquy, we are still looking out for the main Street Investors. But as a top priority, it does not mean had, but you should be cautious of the top priority of the investors. This is the top priority corporate ceos who do not want to be advised by investor groups. So lets see what we agree on. Disclosure comments. I said on the re, mas. That is number one, and there is two and three that you require everybody well, shg, we will get to th but the disclosure conflicts and take commensurate responsibility for what you are sayingch saying. The antirules should apply, and i am open for all how to ensure accuracy. I am open because if people think that what we are proposing is too onerous, and we can get through it in a different way, im open. And as you know there is a lawsuit for this issue, because the basis of the rulemaking is that the proxy solicitation and that the proxy advice is the same as a proxy so lis tag. Well, it is not well, i understand that it is a 32 vote. Well, there are different levels. So there is an ongoing lawsuit, and that is going to heart of the question of the authority, and so my question is if you are will ting to delay t rule making process pending the outcome of the lawsuit . I wont commit to that today. What if you go through the process and the process says you had no authority to do that. Unfortunately, it is a risk that we run, and the advice is that we should be come fortable with where we are. So my problem, mr. Chairman, is the way that you rolled it out. You did get duped. I am not going to be backing away from the fact that we want to do what is best well, it is a great goal, but the letters that you cited were orchestrated by a Dark Money Group funded by many of the corporations that stand to benefit from your proposal. And so they need a group, and you became the mouthpiece. So it is important for you the retract the statements, and let the public know that you are duped. You did not intentionally deceive anybody, but the letters that you used to say that this is for the main street investor, and you are orchestrated for the big group that is pushing hard for the rule, and this is a deceit for the public, and not you, and you ar are going to ma it clear that it is outrageous, and the people who hope they are going to do this, and these are people who are pushing hard to make it happen. And so you became the vehicle for their fraudulent attempts to make it sound like main Street Investors. Thank you, mr. Chairman. And senator brown would like to ask another question. First, i would like to thank senator van holland and the comments and the back and forth for the chairman. We here always in the committee, and particularly from that side of the aisle, ant the mom and pop investors, and all of the Trump Administration wants to take care of the little guys, and i think that the van holland investigation shows that the mom and pop investors have some front not to be conspiratorial in this town, but that is whether of what is happening in the constitution. And let me take a slightly different place, mr. Chairman. Earlier in the opening statement, and yeah, in my opening statement, i asked for an inclusion of the letter of the retirement center, and i would appreciate if the chairman did that. They waited at the round table to have proxy advisers and change the rules to make it more expensive and less independent and less timely, and could make for only government pension proposals to do that. You could do that with the intent of ending employment, but it is going to give the companies two bites at the apple. So how did those sweeping changes that they did not ask for in the compromise and the research they are paying for. How is that helping investors . Senator, i think that robust material does benefit the investors, and they should know what evidence they have when making statements. So if you are making statements in and attempt to influence or solis pit vote solicit any vo and so as i said, i remain open to deal with that. But lets just be clear what we are trying to achieve here. The investor has a robust amount of information to a decision. If it is coming from the proxy Advisory Firm along with the decision, that is better. Well, it appears that we tip too far to companies in investment that they need less tools, and not less, and the direction you seem to be doing is fine. Say, on the other investment mechanisms, and what i want to achieve here is that the people who are making the investment, and the voting decision have as good of a mix, and accurate of a mix that they can have. That is what i want to achieve. That concludes the questions today, and thank you, chairman, for being here. For senators who wish to submit question fos record, they are due on tuesday the 17th. Mr. Chairman, i ask that you respond as promptly as you can to them. Okay. This is the last hearing of the conference, and unless we have scheduled another one. So i want to thank the senators for making it happen, and the witnesses and those who have come before us, and laid the foundation for a significant effort. With that, this hearing is adjourned. [inaudible conversations] [inaudible conversations] [inaudible the House Judiciary Committee approved two articles of impeachment against president trump, abuse of power and obstruction of congress, and now the impeachment debate heads to the house floor. The final articles are expected in the house next week. Follow the impeachment process live on cspan, and live online at cspan. Org or listen live at the free cspan radio app. Sunday at 8 00 p. M. American history tv is going to look back at the impeachment of president bill clinton with the 1998 house floor debate on the articles of impeachment. Today, the republicans with a small handful of democrats will vote to impeach president clinton. Why . Because we believe that he committed crimes that resulted in treating the legal system. We believe that he lied under oath numerous times, and that hem tampered with the evidence, and defied testimony for a court of law, and he has assaulted the legal system in numerous ways. Explore the nations past, and watch the clinton impeachment sunday at 8 00 p. M. Eastern on American History tv. James banner was a team of historians who wrote a history of the president ial misconduct 45 years ago for the house impeachment inquiry of president nixon. President nixon resigned before hearing from the panel. And recently the author of the book lying in state from Fordham University had a meeting on the president ial mistake. This is about 90 minutes. Welcome, and thank you all for being here, and before we get started, i wanted to tell you that i am so happy to be having this event, because we never get to talk about history, and historians