Included in H.R. 3606 are four bills that have already passed the House, and which have been supported by CompTIA as a means of infusing capital into small businesses:
- H.R. 1070 -- Small Company Capital Formation Act – Increases small business SEC exemption from $5 million to $50 million.
- H.R. 2167 -- Private Company Flexibility and Growth Act – Raises the shareholder threshold for mandatory SEC registration from 500 to 1,000 shareholders.
- H.R. 2930 -- Entrepreneur Access to Capital Act – Enables “crowdfunding” by exempting small issues ($1 million/$2 million if audited financials provided) from SEC registration requirements.
- H.R. 2940 -- Access to Capital for Job Creators Act – Removes the prohibition against general solicitation or advertising if all purchasers of the securities are accredited investors. The legislation will enable offline and online forums that bring together investors with companies.
This new bill also includes two pieces of legislation, which have been introduced, but not voted on in the House:
- H.R. 4088 -- Capital Expansion Act – Increase the number of shareholders able to invest in a community bank from 500 to 2,000.
- H.R. 3606 -- Reopening American Capital Markets to Emerging Growth Companies Act – Lowers the SEC and other compliance costs for companies with revenues of less than $1,000,000,000 during its most recently completed fiscal year. [Note that the original H.R. 3606 was amended to also include the other five proposals; thus, the current H.R. 3606 differs from its original version.]
Although CompTIA has not yet opined on these final two bills, the goal of each is both to increase access to capital and to make the process of raising capital less costly. We certainly support that goal.
Accordingly, we urge the House to pass this important bi-partisan legislation. Promoting access to capital and easing the costs associated with complicated SEC requirements is truly a bi-partisan issue. This is an important step that will aid in our continuing economic recovery.
