Virtual Remarks At The Harvard Law School Program On International Financial Systems, 2025 Japan – U.S. Symposium, SEC Commissioner Mark T. Uyeda, Karuizawa, Japan, Nov. 21, 2025

Good evening and thank you for the introduction, John [Gulliver]. Thanks also to Hal [Scott] and Ken [Jimbo] for the invitation to join you in Japan for Harvard Law School Program on International Financial Systems (“PIFS”) annual symposium and to provide the keynote address during the dinner session.[1] You have my appreciation for your efforts to further the important trans-pacific relationship between our countries. I regret that I cannot join you in-person this year in Karuizawa.

A few weeks ago, I was speaking with a friend who would be flying to Japan for the symposium, and he asked whether I had any suggestions about how he should spend his few moments of free time in Japan. While we briefly touched on various cultural or tourist sites, the conversation quickly switched to Japanese cuisine, because — as much as we may try in the United States — it can be difficult to replicate the taste of certain washoku dishes.[2]

So, what should one eat while in Japan? There are some obvious choices, such as sushi, soba, and unagi. But, speaking only for myself, there is one meal that I simply cannot miss: tonkatsu made with kurobuta pork.[3]

Kurobuta, which means “black pig” when translated into English, is juicy, flavorful, and incredibly tender — some Japanese people even say that you can cut it with your chopsticks. What makes all of these attributes possible is the fat content of this particular meat. The marbling and fat contained in kurobuta pork stands in stark contrast to typical American pork, which has been bred and engineered to become ever more lean. In fact, one study released in 1998 asserted that pork sold in the U.S. had 39% less fat than ten years prior.[4] However, as one food critic wrote, “[i]n their zeal to produce the healthy ‘other white meat’ pork vendors have bred all the fat out of the animals. And with the fat went the flavor.”[5]

The U.S. pork industry started to develop leaner meat in part due to government pressure. In the 1970s, the U.S. government introduced “Dietary Goals for the United States,” which emphasized reduced intake of animal fat.[6] Although these dietary goals were characterized as voluntary, they had the real-world effect of pressuring U.S. pork producers to develop hogs that had a fat content closer to chicken — resulting in a much drier and less tasty product.

How does this example relate to the global capital markets? In my view, it raises the important role of regulatory restraint. Financial regulators should not be placing restrictions — either directly or indirectly — on the presentation of new ideas in the marketplace, even if there are high levels of investment risk. Financial regulators should not use their bully pulpit to indirectly influence marketplace behavior, such as through opaque and subjective approaches like reputational risk or reducing investment risk by imposing prudential measures on nonbank financial institutions. Financial regulators should also not misuse their authority to achieve political or social objectives in the course of regulating financial markets.

During the past 50 years, the United States and Japan have led the world in technological innovation. The capital markets have been a significant contributor to such success, by allowing people with ideas to have access to capital to fund their projects to fruition. There have been many successes, but also a large number of business failures; the risk of failure, however, is an important and integral part of capital formation. Working together, the United States and Japan can build upon this past success to foster a productive and enduring economic relationship throughout the 21st century.

The U.S.-Japan Relationship: One of the Most Important in the World

Two years ago at this symposium, I reflected on the evolution of Japan’s markets, the history of corporate governance reforms, and the shared foundations that underpin our capital markets.[7] Today, I would like to speak about the deepening partnership between our two countries and the continued importance of our regulatory cooperation and collaboration.

The relationship between the United States and Japan is one of the most important in the world — economically, strategically, and politically. It spans generations, industries, and continents. Today, it is stronger than at any point in our shared history.

The warm relationship between President Donald Trump and Prime Minister Sanae Takaichi — as well as the close partnership President Trump maintained with the late Prime Minister Shinzo Abe — has reinforced this foundation of trust. Their personal diplomacy has deepened security integration, expanded economic cooperation, and strengthened the cohesion of the Indo-Pacific region.[8] Japan is also the number one foreign direct investor in the United States.[9] This investment has fueled U.S. manufacturing expansion, semiconductor production, electric vehicle and battery development, as well as other advanced technologies.[10] Most recently, Japan has committed investments to building up U.S. manufacturing and supply chain capacity through investments in critical energy infrastructure, artificial intelligence, electronics, and logistics infrastructure, as well as critical minerals.[11] These initiatives will create thousands of high-quality American jobs while supporting shared economic and national security.

A History of Regulatory Cooperation and Collaboration: SEC-JFSA Dialogue

The strength of the U.S.-Japan relationship is reflected in the longstanding collaboration between the SEC and Japan’s Financial Services Agency (“JFSA”). A major milestone was the creation of the bilateral regulatory dialogue, nearly twenty years ago, during the tenure of then-Commissioner, and present-day Chairman, Paul Atkins.[12] Since then, the SEC and JFSA have cooperated and collaborated across market supervision, accounting and auditing, multilateral engagement in groups like the International Organization of Securities Commissions (“IOSCO”) and the Financial Stability Board (“FSB”), as well as cross-border enforcement. It remains one of the SEC’s most successful and longstanding relationships with a foreign counterpart.

In April of this year, the SEC and JFSA re-started holding regular bilateral dialogues between the two agencies. These dialogues are intended to build upon existing efforts to advance coordination on key regulatory issues and developments. The April dialogue was a successful example of the importance of discussing areas of mutual interest. I greatly appreciate the efforts of Shigeru Ariizumi and Toshiyuki Miyoshi of the JFSA to reignite the dialogue. While the U.S. government shutdown prevented us from holding the second dialogue last month, I look forward to it taking place early next year.

Collaboration Amid Developments on Sustainability Reporting

Thus, the Commission seeks to continue strong cooperation with the JFSA. One area where we desire to find more common ground is on sustainability and ESG-related disclosure requirements, which is a topic that has previously arisen on the international level at the FSB, IOSCO, and the Organisation for Economic Co-operation and Development (“OECD”).

In a recent speech to the OECD, Chairman Atkins reaffirmed a foundational principal of U.S. securities regulation: financial materiality must be the core of corporate disclosure requirements and accounting standards in our securities regulatory regime.[13] This position is grounded in longstanding U.S. jurisprudence defining the concept of materiality itself.[14] In the United States, non-financial objectives, such as environmental goals, should be the province of regulators in those specialized areas — not financial regulators.

In other words, non-material and non-financial metrics should not be part of accounting standards or corporate disclosure requirements. This is not to say that climate-related information cannot be financially material. Rather, the SEC’s disclosure framework, dating back decades, already requires issuers to disclose all material information, which includes climate or sustainability-related information if it materially affects the business, financial condition, or operating results of the company.[15]

A more expansive view of the role of sustainability topics in reporting by issuers — including integrated reporting and stewardship practices — means that boards of directors and corporate management, who have a fiduciary duty to the shareholders of their companies, should subordinate their investors’ interests to the political whims of activists, who bear no fiduciary duty to other shareholders. If elected governments desire for a reduction in certain types of emissions, then they should address those objectives directly through environmental legislation aimed at limiting such emissions. Attempting to weave broad sustainability expectations throughout a stewardship code risks blurring the line between what is material to investors and what reflects broader policy aspirations.

The U.S. is not alone amongst jurisdictions globally that are reevaluating disclosure obligations on issuers. Just last week, the European Parliament voted to scale back the scope of companies that will have to comply with the European Union’s corporate sustainability due diligence directive.[16] In an environment of slow economic growth and intense global competition for capital, it makes sense to re-evaluate expansive ESG disclosure mandates that may divert management attention from the business, impose heavy reporting costs, and reduce competitiveness and innovation without clearly improving capital allocation.

By refocusing on financial materiality and reserving broad environmental policy issues for environmental regulators, countries can preserve the advantages of a principles-based model while reducing the risk that ESG disclosure morphs into a quasi-industrial policy tool. Aligning more closely with a financial materiality standard would also enhance comparability for global investors who rely on consistent, financially relevant information across markets.

Conclusion

Looking forward, I remain deeply optimistic about the U.S.-Japan partnership. Our nations share a vision for a free, open, and innovative Indo-Pacific region, one grounded in economic security, open markets, and democratic values. The SEC values the strength of its relationship with the JFSA. Over decades, our agencies have shown that trust and cooperation can withstand shifts in market conditions, geopolitical changes, and evolving regulatory challenges.

The discussions and insights shared at this symposium will further enhance mutual understanding between our countries, strengthen our ties, and allow us to continue building a brighter future for the global financial community.

While I cannot be with you today, I anticipate being in Tokyo in early 2026. So, if anyone would like to join me for teishoku[17] at a tonkatsu restaurant, please let me know.

Thank you.