Should Congress reduce regulations related to securities?
The bill seeks to lessen restrictions associated with stocks, bonds, and other securities that apply to brokers, advisors, and corporations. The bill also seeks increased support for small businesses and startups, as well as wider access to investors by entrepreneurs. The cap for issuers considered “emerging growth companies” would be raised from $1,000,000,000 to $1,500,000,000. It would expand the definition of accredited investor as it applies to private security offerings since certain securities are exclusively offered to accredited investors. Sponsor: Rep. Patrick McHenry (Republican, North Carolina, District 10)
View full bill text ➔
How do you feel?
Oppose
Support
Opponents say
• "This legislation will only weaken investor protection and add to the explosive growth of unregulated private securities markets and private funds, thereby depriving the public securities markets and the investors that rely on their opportunities to build secure financial futures." Source: Joseph Brady, NASAA Executive Director
• "H.R. 2799 would significantly weaken investor protections in several ways. First, it would expand the number of companies that are currently able to offer securities without needing to register with the SEC or provide important investor-focused disclosures. Provisions in Division A such as Title VIII (Expand WKSI Eligibility), Title IX (Smaller Reporting Company, Accelerated Filer, and Large Accelerated Filer Thresholds) as well as Title V (Regulation A+ Improvement) exempt more companies from SEC registration and disclosure requirements, therefore expanding the size of the private markets which already outnumber the public markets two-to-one. This opens the door to more investors placing their nest-eggs in private securities, which lack sufficient transparency and liability protections, and are generally riskier than public securities." Source: Democratic members of the House Financial Services Committee
Proponents say
• "This legislation is a compilation of 23 individual bills that would collectively improve the regulatory environment for pre-IPO and small public companies, expand the ability of private businesses to raise capital and connect with potential investors, and expand research coverage in the public markets. The Chamber has been on record supporting several of these bills in recent years, several of which have garnered bipartisan support." Source: Tom Quaadman, Executive Vice President Center for Capital Markets Competitiveness U.S. Chamber of Commerce
• "Capital formation is critical to creating long-term sustainable growth. Today however, increased regulatory and compliance costs discourage emerging companies from entering our public markets and disproportionately burdening small businesses and other job creators in need of capital. Additionally, arbitrary and outdated regulations exclude sophisticated but not wealthy investors from access to high growth asset classes which have effectively been reserved for the elite wealthy class. This further exacerbates the haves from the have-nots and further exacerbates economic challenges in our society. H.R. 2799 addresses these problems building on the success of the 2012 Jobs Act to right-size onerous regulatory barriers, provide entrepreneurs access to much needed capital, and expand investment opportunities within private markets in a safe and structured manner." Source: Rep. Patrick T. McHenry (Republican, North Carolina, District 10)
- Understanding the SEC (Investopedia)
- Inflation Gives Millions New Access to Investment for the Wealthy, Says SEC (CNBC)
- SEC Wrestles With How to Open Private-Market Door to Ordinary Investors (InvestmentNews)
- Cryptocurrency and Digital Asset Issues for Broker-Dealers (Reuters)
- Representative Patrick T. McHenry Largest Donors (OpenSecrets)
