Remarks At The 12th Annual Conference On Financial Market Regulation, Paul S. Atkins, SEC Chairman, Washington D.C., May 16, 2025

Thank you, Pedro, for your kind introduction and thank you, ladies and gentlemen, for joining us today as we dive into an essential aspect of our regulatory framework – economic analysis.  

In order to keep the compliance folks here at the SEC happy, I must first note that the views I express here today are my own and do not necessarily reflect those of the full Commission or of my fellow Commissioners.

Considering the ongoing changes in financial landscapes, the need for thorough economic analysis of the Commission’s actions becomes increasingly important.  High-quality economic analysis is an essential part of any SEC rulemaking.  It is critical that a rule’s potential benefits and costs be considered in ensuring that it is in the public’s interest. It also helps that it happens to be the law.

From Pedro’s introduction, you can see that this is my third tour of duty at the SEC – having previously served from 1990-1994 on the staff of former Chairmen Richard Breeden and Arthur Levitt, as a Commissioner from 2002-2008, and now as Chairman.  

This is a unique moment to come back here to lead the agency, as opportunities abound to facilitate capital formation when the investment environment and the capital markets are undergoing significant change.

During my tenure as Commissioner, I often emphasized the need for rigorous economic analysis.  As Chairman, I aim to ensure that those principles are the bedrock upon which our sound regulatory policies are built.  It is important for us as an agency to ensure that thorough and unbiased economic analysis is not being overshadowed by any driving desire to implement regulatory measures that impose unnecessary burdens on our markets.

Before we act, we first must identify a problem to be solved and propose a resolution that is tailored to solve it – rather than create a solution in search of an unidentified problem.

The SEC, in its regulatory capacity, is tasked to balance investor protection with promoting capital formation and market efficiency.  In years past, the Commission has unfortunately demonstrated a tendency to prioritize regulatory expansion over meticulous economic analysis, potentially jeopardizing this delicate balance.

For example, in some of the Commission’s recent economic analysis, the adopting releases have stated, “Where possible, we have attempted to quantify these economic effects . . . however, we are unable to reliably quantify the potential benefits and costs of the final rul[e].”[1]

Going forward, we must show our work so that the public understands what we are proposing and why.  We must show that we have considered the potential effects of our rules, including the negative ones.

Robust economic analysis of our regulatory initiatives helps us to do just that.  It provides us with a framework to assess the potential unintended consequences of new regulations.  

In choosing when and how to regulate our markets we should be cognizant to measure twice and cut once.  Otherwise, we risk damaging our markets and unnecessarily adding costs to issuers and investors.

Like it or not, we operate in a global environment. There are alternatives, and investors can vote with their feet and pocketbooks.  Our job at the SEC is to ensure that we maintain a market that is the best in the world for investors and for issuers.  You cannot have one without the other.

As I have said before, regulation is a bit like golf.[2]  It requires careful, precise strokes, and meticulous analysis of shot selection to achieve the intended result.  For instance, if you choose the wrong club, or swing too hard, you risk overshooting the green.[3]  In the end, your short game of precision is most often the crucial factor to sink the ball in the hole.

As we navigate the complexities of modern financial markets, we must continually refine our methodologies while adapting to new challenges.

I am thankful that you all are here to help us to enrich our understanding of markets and market dynamics.  By incorporating diverse perspectives and a wide range of research, we enhance the robustness of our analyses and ensure that our regulatory measures are well-informed. 

We value the research that you do.

It is a new day at the SEC, and I look forward to engaging with you all as we promote policies that foster economic growth and strengthen confidence in our markets.

Before I turn it over to our first panel, I would like to thank everyone who contributed to the success of this event, especially the organizers, Amy Edwards and Vlad Ivanov from the Division of Economic and Risk Analysis, Kathleen Hanley from Lehigh University, and Pedro Matos from the University of Virginia.

Thank you.