In a letter to SEC Chair Gary Gensler, CFA Financial Services Counsel Dylan Bruce offered strong support for rulemaking that would help restore the health and vitality of our public markets and limit the decades-long, excessive growth of private markets. “We appreciate the fact that the Commission’s regulatory agenda includes reforms regarding Regulation D (Reg. D), Form D, the accredited investor definition, and Section 12(g) of the Exchange Act, and we urge the Commission to undertake these rulemakings without delay,” the letter stated.

The letter traced the history of how, for too long, Congress and the Commission have promoted policies that expanded private securities markets, at the expense of public markets. In addition, the letter highlighted the implications for investor protection and market integrity that result from such a decline. “The benefits to investors, market integrity, and capital formation of public securities markets are manifest and indisputable. Public markets require registrants to operate with transparency and accountability, and have critical safeguards,” the letter stated. “By comparison, private markets carry significantly higher risks for investors, and permit issuers to operate with neither transparency nor accountability,” the letter added.

“Given the unbridled expansion of private markets, we encourage you to prioritize the public/private-related reforms on the Commission’s regulatory agenda,” Bruce wrote. “Without regulatory changes, the excessive growth of private markets is unlikely to slow anytime soon. This unchecked growth will exacerbate the decline of public markets, erode investor protections, and diminish the integrity of our capital markets,” the letter concluded.