On December 4th, the House of Representatives passed a bipartisan bill that would restore an exemption from registration with the Securities and Exchange Commission ("SEC") for private equity fund advisers that limit leverage. The move is an effort to roll back a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") requiring private equity fund advisers to register with the SEC. Sponsors of the bill say that costs associated with registration deters money from small businesses, negatively impacts job creation, and does not further the Dodd-Frank Act's purpose of making the risk of another financial crisis less likely.

H.R. 1105, the Small Business Capital Access and Job Preservations Act exempts advisers of private equity funds "that [have] not borrowed and [do] not have outstanding principal in excess of twice [their] invested capital." The bill calls upon the SEC to issue final rules regarding recordkeeping and reporting by private equity fund advisers relying on the exemption and to define the term "private equity fund" for purposes of the exemption.

The bill faces challenges with both the White House and the Senate. The White House has threatened to veto the measure and no companion bill is currently pending in the Senate.