U.S. House of Representatives Committee on Financial Services
06/01/2023 | Press release | Distributed by Public on 06/01/2023 08:46
House Passes Bipartisan Financial Services Capital Formation Legislation
House Passes Bipartisan Financial Services Capital Formation Legislation
Washington, June 1, 2023 -
This week, the U.S. House of Representatives passed four pieces of bipartisan financial services legislation to facilitate capital formation by strengthening public markets, helping small businesses and entrepreneurs, and creating opportunities for all investors.
The financial services bills passed by the House include:
H.R. 2792, the Small Entity Update Act, sponsored by Chairman Ann Wagner (MO-02), would direct the SEC to assess regulatory costs of compliance for small and growing businesses, ensuring that regulations placed on these businesses are not overly burdensome.
Read an excerpt of Chairman Wagner's remarks in support H.R. 2792 below:
"The lack of access to capital makes it challenging for small business owners to grow and expand their companies, which can limit job creation and economic growth. That is why I introduced the Small Entity Update Act… Small entities simply can't afford the number of lawyers and regulatory experts that large, multinational firms can to comply with every regulation while still being able to afford the cost of doing business."
H.R. 2795, the Enhancing Multi-Class Share Disclosures Act, sponsored by Rep. Gregory Meeks (NY-05), would ensure shareholders receive more uniform information in proxy materials without prohibiting multi-class share structures altogether.
Read an excerpt of Chairman Wagner's remarks in support H.R. 2795 below:
"By requiring disclosures regarding voting power, particularly regarding officers and directors and those who have more than 5 percent voting power, H.R. 2795 will ensure shareholders receive more uniform information in proxy materials… rather than prohibiting multi-class share structures altogether, H.R. 2795 represents a thoughtful and balanced approach to enhance transparency without eliminating class structures that encourage founders that may not otherwise go public to do so."
H.R. 2796, the Promoting Opportunities for Non-Traditional Capital Formation Act, sponsored by Rep. Maxine Waters (CA-43), would empower underrepresented and rural small business owners to learn about capital formation opportunities.
Read an excerpt of Chairman Wagner's remarks in support H.R. 2796 below:
"Last month, the Financial Services Committee passed numerous bipartisan bills out of our committee to facilitate capital formation and increase access to capital for entrepreneurs and small business. H.R. 2796 is a commonsense piece of our Committee's efforts and complements the other bills we passed… by requiring the Advocate to provide educational resources and host events to promote capital-raising options for underserved entrepreneurs, this bill will assist entrepreneurs throughout the entire country in utilizing the capital-raising provisions within our securities laws best suited for their needs and circumstances."
H.R. 2797, the Equal Opportunity for All Investors Act, sponsored by Rep. Mike Flood (NE-01), would increase the number of pathways to qualify as an accredited investor by instituting a test administered by FINRA, allowing sophisticated-but-not-wealthy individuals to access high-growth asset classes that would not otherwise be available to them.
Read an excerpt of Chairman Wagner's remarks in support H.R. 2797 below:
"H.R. 2797 represents a thoughtful approach to expanding the 'accredited investor' definition to include individuals who are certified through an examination established by the SEC and administered by FINRA. Under this bill, if you can demonstrate competency with these types of investments through an exam, then you qualify as an 'accredited investor… by expanding the pathways to qualify as an 'accredited investor' beyond wealth tests, this bill modernizes the outdated definition that has inappropriately sidelined sophisticated-but-not-wealthy individuals from high-growth asset classes historically reserved for the wealthiest individuals."
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