About Hester Peirce
SEC Commissioner Hester Peirce has continued to advocate for clear regulatory frameworks for digital assets and tokenized securities. In recent appearances, she discussed the SEC's work on an "innovation exemption" for tokenized securities, which she described as "not even that big of a step" and "pretty traditional," clarifying that it would not cover synthetic securities held through special purpose vehicles. She also emphasized that the SEC and CFTC are conducting joint work to determine where products should be regulated, and that the SEC is preparing for potential rule-writing obligations if the CLARITY Act passes, which she said she expects to happen "this summer." Peirce noted that her term ended in June 2025 but she can remain until the end of 2026, and that she plans to leave before that time to teach securities regulation at a law school.
Peirce stated that she is "not looking for ways to pull people into the regulatory regime that don't belong" and cautioned that "some of what's out there at least rhymes with what we see in some securities type arrangements," urging market participants to assess whether securities laws apply to their activities. She identified priorities including enabling token fundraising, updating transfer agent rules, and addressing custody issues. Peirce also stressed the importance of protecting self-custody, privacy in financial transactions, and developers' ability to write code without permission, while noting that the SEC continues to pursue enforcement against bad conduct. She encouraged builders to "build things that meet actual human needs" and to "come in and talk to us" about registration or relief.
Source: AI-verified profile updated from Hester Peirce's recent appearances.
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Transcript (6 segments)
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Interviewer0:00
Do you think there's validity to these pre-IPO markets? I think one of them had it pretty close with the SpaceX IPO today. The price discovery was relatively consistent with where the IPO inevitably launched. But do you think there's validity here? I'm just curious if you think there's a path maybe for these to come and become a primary vehicle for retail investors to get exposure to these companies pre-IPO.
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Hester Peirce0:27
I mean, I think what you're describing is there's a real retail appetite to get access to these companies earlier in their growth cycle. And that's why my preference is that we work on figuring out ways to encourage companies to go public earlier and to say, you know, this is a good framework. We are trying to create a framework that gets investors the information that they need, but also that doesn't burden companies so that they don't want to go public. There are other alternatives out there. As you say, many of them are available overseas to get economic exposure to companies. If things like that are to trade in the United States, they would have to go through the processes required. In the US, if you want to sell a security, it has to either be registered or subject to an exemption. So, people would have to figure out how to comply with that. And then in terms of perpetual markets, that's an interesting market, an interesting product, and I think as the CFTC is looking at them and trying to figure out how to bring that market onshore, that's interesting to watch. Some of those could potentially be within our remit. And so that's an area where I talked about the CFTC-SEC harmonization. One of the things we're trying to do is make sure that everyone's on the same page about where product is regulated.
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Interviewer2:04
And what does the harmonization look like in practice? Maybe using perpetuals as an example, given that these things are relatively new, maybe they don't fit as cleanly into the regulatory structure of a security or a commodity or a future. How do you and the CFTC go about analyzing some of these new technologies, ultimately dissecting it, putting some clear definitions? How have you been able to find harmony with the CFTC, whereas other regulatory regimes haven't?
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Hester Peirce2:37
Well, it's a work in progress. We're doing a lot of joint work to think through these issues, to look at different products and discuss them. But we're also looking for people to help us do that. So, we're looking for feedback from the public. And we welcome that feedback, and I think you'll see that there are a lot of opportunities to come in and weigh in on that process. So, if folks have a product that they are trying to launch, and they want to know where does it fit, we do welcome specific requests, also.
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Interviewer3:17
Absolutely. Commissioner Peirce, I think I'd love to just kind of understand, you know, as maybe a longer-term view on, given that tokenized equities are progressing, tokenization in general is progressing, and you're sort of looking at the horizon, and maybe riding off into the sunset as we approach your tenure, how do you think this space in general is going to... What is your hope for how you'd like to leave the crypto task force, Project Crypto? These have been very, very strong initiatives. And as you transition out, what are some of the things that you hope are carried about? And how can we ensure that these are carried through in the coming regulatory regimes?
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Hester Peirce4:11
Well, I hope that we'll just keep an open mind about innovation and about the possibility of improvements in the financial world that we regulate. I think often regulators can get very comfortable with the status quo because we know how it works. So, we sort of stick with it the way it is. So, an open-mindedness I think is important. I'm not concerned about that with Chairman Atkins. He is very open-minded to thinking about how new technologies fit within the existing regulatory scheme and he's open to the idea of adjusting rules where needed. I think that I'm not too worried about how things will be after I leave because there's real momentum here at the SEC, in Congress, at the banking regulators to really think about these issues, try to come up with rules that are appropriate and make sense. So I think that it's something that I look forward to watching from the outside. I think there are going to be areas that people debate about and I hope that we will respect certain basic principles. The ability of people to self-custody is very important. That should not be compromised. The ability of people to protect their privacy in their financial transactions is very important, should be protected. The ability of developers to develop code and put it out there without having to get permission from someone to do so. These kind of principles I think are really important. We obviously have seen a lot of hacks and bad activity and I think it's in everyone's interest to try to prevent bad actors from taking advantage of the technology for their purposes. And I love seeing industry-led grassroots initiatives to combat some of those kinds of things. And that's important, but it really, for me, the biggest concern is that we will, as we draft these rules and statutes, respect those really core principles. And I think we will find that that will put us in a better place at the end of the day.
