Next week, the House is scheduled to debate two bills designed to reduce regulatory burden on small businesses in order to facilitate access to capital. H.R. 5424, the Investment Advisers Modernization Act, was approved by the Financial Services Committee on June 16, 2016. H.R. 2357, the Accelerating Access to Capital Act, was approved by the Financial Services Committee on May 20, 2016. H.R. 2357 will also consist of two other bills, H.R. 4850 and H.R. 4852.

  • H.R. 5424 proposes to amend the Investment Advisers Act of 1940 and directs the Securities and Exchange Commission to amend its rules to modernize certain requirements relating to investment advisers.
  • H.R. 2357 proposes to direct the Securities and Exchange Commission to revise Form S-3 so as to permit securities to be registered pursuant to General Instruction I.B.1. of the form if either: (1) the aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant is $75 million or more, or (2) the registrant has at least one class of common equity securities listed and registered on a national securities exchange.
  • Incorporated into H.R. 2357, H.R. 4850, the Micro Offering Safe Harbor Act, proposes to amend the Securities Act of 1933 to exempt certain micro-offerings from the Act’s registration requirements. To qualify for the exemption (1) each purchaser has a substantive pre-existing relationship with an owner; (2) there are 35 or fewer purchasers; and (3) the amount does not exceed $500,000. H.R. 4852, Private Placement Improvement Act of 2016, proposes to direct the SEC to revise the filing requirements of Regulation D (which provides exemptions from securities registration requirements) to require an issuer that offers or sells securities in reliance upon a certain exemption from registration to file, no earlier than the date of first sale of such securities, a single notice of sales containing the information required by Form D for each new offering of securities.

Financial Services Committee Chairman Jeb Hensarling noted that “[t]hese bills are solutions that will more appropriately balance rules with the urgent need to provide small businesses with greater access to capital so they can start up, hire workers and grow.”