Tuesday, July 14, 2015

House to Vote on Small Business Bills, Other Revisions

By Mark S. Nelson, J.D.

The full House is set to vote on a number of bills this week that would revise the securities laws to better accommodate small businesses. Five of the bills come from a package of thirteen bills approved in May by the House Financial Services Committee. These bills feature several adjustments to the Jumpstart Our Business Startups (JOBS) Act, and to other laws. The House will also consider several banking and mortgage-related bills.

Monday’s action. Up first is the Small Business Investment Company Capital Act of 2015 (H.R. 1023), sponsored by Rep. Steve Chabot (R-Ohio). Unlike some of the bills due for votes this week, this one came out of the House Small Business Committee and would amend the Small Business Investment Act of 1958 to raise the funding limit from $225 million to $350 million. This provision, which governs the leverage limit for multiple licenses under common control, was last increased in 2009.

According to an explanation of the bill (House Rep. No. 114–189), the change is needed to ensure that successful SBIC managers can seek investors who want higher returns in today’s historically low interest rate environment. The House Small Business Committee approved the bill by a voice vote in June, and the full House was scheduled to vote on it later yesterday. Another bill set for a vote today deals with advisers to SBICs.

JOBS Act tweaks and other bills. Today, the House is expected to consider five of the bills approved by the Financial Services Committee two months ago. Each of the bills will be considered under a suspension of the rules. The bills are:

  • Improving Access to Capital for Emerging Growth Companies Act (H.R. 2064)—The bill makes three significant changes to the JOBS Act. Like H.R. 37 (passed by the House in January), this bill shortens the time before a road show when an emerging growth company (EGC) must publicly file its once-confidentially submitted registration statement and any amendments to it from 21 to 15 days. The bill also provides for a grace period during which an EGC that lost its EGC status after it confidentially submitted (or publicly filed) a registration statement for SEC staff review may continue to be treated as an EGC. An amendment to the version of the bill to be considered adds Form F-1 to a provision that would ease the disclosure requirements for EGCs on Form S-1 regarding historical financial information mandated by Regulation S-X
  • SBIC Advisers Relief Act of 2015 (H.R. 432)—Clarifies the treatment of advisers for SBICs and venture capital funds under the Investment Advisers Act. 
  • Holding Company Registration Threshold Equalization Act of 2015 (H.R. 1334)—Makes conforming amendments to the Exchange Act for savings and loan holding companies. 
  • Small Company Simple Registration Act of 2015 (H.R. 1723)—Directs the SEC to revise its rules to allow smaller reporting companies to incorporate by reference on Form S-1 any documents the company files with the agency after the registration statement becomes effective. 
  • Swap Data Repository and Clearinghouse Indemnification Correction Act of 2015 (H.R. 1847)—Amends the Commodity Exchange Act (CEA) to clarify that the CFTC must get a written confidentiality agreement from certain entities before sharing swaps data. Related provisions would apply to security-based swaps governed by SEC rules. The version of the bill to be considered adds conforming amendments to the CEA and the Exchange Act. 
Two bills that were initially to be considered today were later removed from a list published by House Majority Leader Kevin McCarthy (R-Cal). The Encouraging Employee Ownership Act of 2015 (H.R. 1675) directs the SEC to amend its regulations to increase the disclosure thresholds for compensatory benefit plans. This bill drew some opposition and was reported by the Financial Services Committee by a vote of 45-15.

The other bill, the Streamlining Excessive and Costly Regulations Review Act (H.R. 2354), directs the SEC to determine if any significant regulations issued by it are outmoded or excessively burdensome. This bill also has its critics, resulting in a committee vote of 41-16.