The House Financial Services Committee on Wednesday approved a group of bills designed to make it easier for small companies to raise capital and relax regulations for investors, or potentially set the stage to make it easier.
Four of the bills would call for studies or reports.
Chairman Jeb Hensarling of Texas predicted that all the bills would be advanced by voice votes, an unusual occurrence for a committee where partisanship has led to several multi-day markups in the current Congress.
Ranking member Maxine Waters of California said that at times during previous markups Hensarling has called a bill bipartisan even though it only garnered a single vote from the committee’s 26 Democrats. But six of the bills under consideration Wednesday were authored by Democrats, she said.
“This is true bipartisanship,” she said.
Waters said she expects the bills approved Wednesday to become part of an updated version of a 2012 law that was also designed to ease regulations and thus stimulate job creation. President Donald Trump also signed into law in May a banking deregulation measure.
Hensarling noted that a collection of capital formation bills aimed at helping small businesses raise capital and encourage companies to go public have had hearings in the Senate Banking Committee. He also referred to a commitment from Senate Republicans to consider a second package of deregulatory bills.
“We also know due to a commitment at the Senate, the banking bill is yesterday’s news,” he said. “But the capital formation bill, a separate and distinct part of our jurisdiction, is part of tomorrow’s news. And we are attempting on this committee and in this House to put together a strong bipartisan package to help our small businesses, our entrepreneurs and to be able to compete with China.”
He also said the committee’s Republicans and Democrats worked together to approve a bill that would broaden the authority of the Committee on Foreign Investment in the United States. That bill passed the House last month 400-2. It is largely aimed as safeguarding sensitive technology, especially from China.
“At least part of the solution in dealing with China is to make sure that more companies want to go public in the United States of America,” Hensarling said.
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The first bill approved by voice vote would require the Securities and Exchange Commission to revise definitions on small businesses in its rules that came out of a 1980 law . The rules were narrowly written so that “no one” can qualify for regulatory relief under the law, said bill sponsor Gwen Moore, a Wisconsin Democrat. The bill is co-sponsored by Michigan Republican Bill Huizenga.
Other bills approved by voice votes would:
- require the SEC to study whether the current limit on mutual fund ownership of an individual company is limiting capital formation, particularly for newly public companies.
- require a study by the SEC on whether the agency should clarify and enhance existing prohibitions against insider trading.
- require the SEC to describe facts and circumstances it considers in determining whether a component of a national securities exchange business is considered a facility of the exchange for regulatory purposes. Many exchanges have moved beyond listing and trading stocks and sell additional products and services to members and listed companies.
- require the SEC to revise definitions so as to relax rules that allow venture capital firms to not have to register as registered investment advisers.
- require additional disclosures by public companies with more than one class of common stock.
- create a task force at the SEC to examine and identify challenges facing senior investors, and to report every two years on recommended regulatory or statutory changes.
An eighth bill is expected to be approved later Wednesday. The bill would require the SEC to study the direct and indirect underwriting fees for mid-sized initial public offerings and to report to Congress with its findings and recommendations.
According to Library of Congress records, the House Financial Services panel has been one of the chamber’s most active committees in the 115th Congress, considering 150 bills in committee with 93 being passed by the House. That includes eight passed by the House on Tuesday.