Remarks At The Meeting Of The Investor Advisory Committee, SEC Commissioner Mark T. Uyeda, Washington D.C., June 5, 2025

Thank you so much, Brian [Schorr]. It is great to see everyone here today in person. Again, thank you for your work on this committee. Virtual interactions are great, but we lose something when we are virtual all the time.

We have a very interesting set of topics today. It is amazing how quickly time flies. It does not seem that long ago that I was staffing then-Commissioner [Paul] Atkins on a series of three proxy roundtables that the Commission held under Chairman [Chris] Cox back in 2007. In fact, Jill Fish, who is here, was a part of those roundtables. Proxy access was the issue of the day. However, the Financial Crisis in 2008 interrupted some of our work. Although we ultimately adopted a concept release on proxy plumbing in 2010,[1] we never returned to some of the concerns identified in the proxy process, such as over-voting, under-voting, and vote confirmation. We have had efforts in this space, and I know some solutions have been proposed, such as end-to-end vote confirmation, but we have never comprehensively revisited this issue.

One of the topics that we did not address in 2007 was the role of asset managers, the funds that they advise, and the investors in those funds. The state of passive ETF index funds is very different now than in 2007, especially their size and growth.

This is one of the most exciting aspects of our markets. Things evolve, and things change. When I was detailed to the Senate Banking Committee a couple years ago, this was a new issue. We saw the rise of large amounts of assets under management through broad-based indexed ETFs. These funds offered diversification and often have very low costs.

Today, index fund asset managers represent a larger percentage of beneficial owners. These vehicles are intended to be passive—not active. You can think of the term “active” in a few ways. One, you can actively choose your buy and sell positions; or two, you can actively vote your shares. When I worked on the Senate Banking Committee, we held a hearing on this topic. A lot of ideas have emerged and evolved. As a regulator, we must tackle these changes. For example: Do we have the right safeguards in place? Are we looking at the rise of influence through shareholder voting? What is the impact of voting power being increasingly held in these passive collective vehicles?

An example of these emerging trends is majority voting for directors and say-on-pay for executive compensation. After Staff Legal Bulletin 14L,[2] we saw the floodgates open on these types of shareholder proposals. As such, it is timely to request feedback on this topic from the committee.

With respect to non-GAAP measures, given our action yesterday regarding foreign private issuers,[3] I would be remiss if I failed to reference International Financial Reporting Standards (IFRS). Although they differ from GAAP, we have concluded that they are a set of high-quality accounting standards. In addition to GAAP and IFRS, non-GAAP and non-IFRS measures are also presented by companies. We must consider how management, boards, and investors consider those measures. I look forward to your discussion on this topic.

I also look forward to your discussion on mandatory arbitration. Arbitration has very deep roots in federal law. There are pros and cons to each type of legal forum. For example, some broker-dealer claims may be appropriate for arbitration because it is a less expensive forum. However, there are other drawbacks to arbitration, and I look forward to this Committee’s thoughtful discussion.

I also note that the Office of Investor Research recently published analysis under the Thoughtful Households Relating InVesting Experiences (THRIVE), a nationally representative survey panel.[4] This survey includes noteworthy observations on investor behavior.[5] Financial regulators often expend significant resources evaluating the practices of major market participants. However, economic data on the preferences and practices of retail investors should also be an important component of our regulatory oversight.

For example, the survey includes information on important topics, such as:

• The types of investments the U.S. population holds;
• The proportion of the U.S. population that purchased various asset types, including crypto;
• Why individuals made certain investment decisions; and
• An evaluation of the financial well-being of investors.[6]

One notable observation is that more investors than non-investors report high financial well-being and more non-investors than investors report low financial well-being.[7] This result should come as no surprise. Participation in capital markets yields economic benefits and the data reinforces the view that investing in capital markets tends to improve individual financial outcomes.

An additional survey question is also relevant to our path moving forward. The THRIVE Survey asks: “Why did people purchase a financial investment.”[8] This question is relevant to a critical evaluation of SEC policies during the past four years. When asked the reasons for buying an investment, purchasers identified “future growth for the investment [being] strong” as the number one reason for buying an investment.[9] Other considerations were seeing the investment as a “good opportunity,” “wanting to invest in something new,” and “[thinking] the investment was undervalued.”[10] The data indicates that fundamental economic concerns primarily drive individual investor behavior. We can leverage these conclusions in future policymaking efforts. We should be mindful of these economic considerations when pursuing social or political disclosure rules that are not rooted in financial materiality. Investors are looking at ways to improve their economic circumstances and, as such, our tripartite mission should guide our policymaking path.

Thank you to the Committee members and panelists for your time in preparing for this meeting. I would also like to thank our Investor Advocate, Cristina Martin Firvida, and her staff for their hard work in organizing today’s meeting and for their research on these important issues.