House Committee OK’s SEC BillDecember 16, 2015
On Dec. 9, the House Financial Services Committee unanimously approved the SEC Small Business Advocate Act of 2015 (H.R. 3784). The bipartisan bill was introduced by Rep. John Carney (D-Del.) on Oct. 21 and had three original cosponsors, Reps. Sean Duffy (R-Wis.), Mike Quigley (D-Ill.) and Ander Crenshaw (R-Fla.). However, the bill has since picked up five additional cosponsors in December alone, including House Small Business Committee Ranking Member Nydia Velazquez (D-N.Y.). Shortly after its introduction, NSBA signed on to a letter of support for H.R. 3784 with others in the small-business community.
H.R. 3784 makes important changes to the Securities and Exchange Commission (SEC) and the way that it is informed on small business issues. The SEC regulates all securities including those issued by small businesses to form capital. The importance of this role cannot be overstated and the form those regulations take often directly impacts how accessible capital is for small businesses.
The Office of the Small Business Advocate (OSBA) within the SEC created by the legislation would be modeled after the Office of the Investor Advocate created by the Dodd-Frank Act. The head of the OSBA would be appointed by, and report directly to the SEC. The OSBA would be tasked with providing input on regulations impacting small businesses and serve as a resource for small businesses having difficulty dealing with the SEC. Under the legislation, the OSBA would also have to create an annual report detailing the steps it has taken to improve SEC regulation of small business capital formation and what areas of regulation could still be improved. The Commission will be required under the statute to respond to all of the OSBA’s recommendations within three months of submission.
The legislation is fairly non-controversial and is ultimately expected to pass the House. However, there is no timeline for when it will be brought to the floor for consideration. The timeframe for progress is also vague, as there is no companion bill pending in the Senate.
NSBA supports H.R. 3784 because it ensures that small businesses have a strong, independent voice at the SEC that will help business owners across the country access the capital they need to grow and create jobs. For these reasons, NSBA is hopeful that in New Year, Senate leadership will make introduction and passage of this bill a priority.