House Financial Services Republicans release capital formation agenda

Republicans on the House Financial Services Committee, led by ranking member Rep. Patrick McHenry (R-NC), released their capital formation agenda.

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The agenda seeks to strengthen public markets, help small businesses and entrepreneurs, and increase opportunities for all investors.

On April 5, McHenry released a Republican staff report highlighting how the bipartisan Jumpstart Our Business Startups (JOBS) Act of 2012 helped spur capital formation and job creation. He also hosted a Republican roundtable where a broad array of experts on capital formation discussed the many positive impacts of the JOBS Act on small businesses and investors and examined how Congress can build on its success to spur job creation.

“Capital formation is critical to creating long-term, sustainable growth,” McHenry said. “Democrats continue to pursue policies that increase regulatory and compliance costs. These costs restrict everyday Americans’ access to investment options, discourage early-stage companies from going public, and disproportionately burden small businesses and other job creators in need of capital. By building on the success of the bipartisan JOBS Act of 2012, we can rein in these onerous barriers and ensure U.S. capital markets remain the envy of the world. Committee Republicans have identified commonsense, pro-growth reforms that will strengthen public markets, help small businesses and entrepreneurs, and increase opportunities for all investors. I’m proud to announce these proposals to foster capital formation as a central component of Committee Republicans’ agenda.”

To bolster each of those three areas, Republicans have introduced several bills.

To strengthen public markets, Republicans introduced the Helping Startups Continue to Grow Act (H.R. 3448), which would extend certain exemptions and reduce disclosure requirements for companies that were emerging growth companies (EGCs) but are still not fully mature.

To help small businesses and entrepreneurs, McHenry is sponsoring the Small Entrepreneurs Empowerment and Development (SEED) Act (H.R. 5458), which would create a burden-free regulator regime for small equity offerings without the threat of SEC litigation.

To increase opportunities for investors, committee Republicans introduced the Increasing Investor Opportunities Act (H.R. 4262), which would provide new investment opportunities for investors by allowing publicly offered closed-end funds (CEFs) to invest up to all its assets in private securities.

“The bi-partisan JOBS Act was signed into law in 2012, and the impact has been true to its name – there was an undeniable jumpstart to capital formation, supporting the evolution of growth enterprises in areas such as healthcare and technology and significant job creation,” Jeffrey Solomon, chair and CEO, Cowen, said. “Many of the growth companies that are now ground-breaking leaders in their sectors are doing so because the JOBS Act enabled them to fund their businesses and add the people and resources needed to achieve their goals. The legislative proposals led by Congressman McHenry will further refine capital formation policies and enhance the framework for investors to engage with these emerging companies.”

The full list of the bills can be found at the House Financial Services Republicans website.