In remarks to the U.S. Securities and Exchange Commission (SEC) Investor Advisory Committee, Commissioner Hester M. Peirce argued that SEC involvement in corporate governance and disclosure should be calibrated to balance benefits and costs for companies and shareholders, while pressing for a workable U.S. framework for the issuance and trading of tokenized equity securities. She said SEC staff is working on a tailored innovation exemption to permit tokenized securities activity in the United States with investor protection guardrails, including Commission oversight. On shareholder engagement, she backed enabling all shareholders to use standing proxy voting instructions and supported the SEC’s recent acknowledgment that mandatory arbitration provisions do not violate the federal securities laws. She also argued that eligibility to submit shareholder proposals under Exchange Act Rule 14a-8 should be limited to shareholders whose interests align with those of the corporation to avoid proposals that divert corporate resources toward idiosyncratic objectives. On tokenization, she distinguished issuer-sponsored blockchain issuance that preserves traditional ownership rights from third-party sponsored tokens that may provide synthetic exposure without ownership or voting rights, and highlighted open questions on how to apply intermediary-focused rules to activity that can occur without intermediaries, including the relevance of Regulation NMS, implications for settlement and short selling, interoperability across blockchains, and the design of any innovation exemption. In the Committee’s discussion of a draft recommendation on public company AI disclosures, she questioned whether “uneven” AI disclosures are inherently problematic, warned that prescriptive requirements could shape corporate behavior, and challenged the absence of a consistent materiality qualifier and the case for the SEC to define AI.
U.S. Securities & Exchange Commission 2025-12-04
U.S. Securities and Exchange Commission Commissioner Peirce signals tailored innovation exemption for tokenized equities and supports tighter Rule 14a-8 access
SEC Commissioner Hester M. Peirce called for a balanced SEC role in corporate governance and disclosure, advocating a U.S. framework for tokenized equity securities with investor protections. She supported enhancing shareholder engagement, including proxy voting instructions, and suggested limiting shareholder proposal eligibility under Rule 14a-8. Peirce addressed tokenization complexities, distinguishing issuer-sponsored from third-party tokens, and raised concerns about AI disclosure requirements lacking a consistent materiality qualifier.