Wagner Capital Formation Bills Pass Financial Services Committee

Washington, D.C.  – Congresswoman Ann Wagner (R-MO), Chair of the Subcommittee on Capital Markets, released the following statement after she passed two major capital formation bills out of the Financial Services Committee:

“As Chair of the Financial Services Subcommittee on Capital Markets, promoting greater capital formation and easier access to capital for entrepreneurs has been a major priority of mine.  Today I am proud to announce the Financial Services Committee passed two of my bills that will help businesses grow and address our many concerns about the SEC’s onerous rulemaking processes. 

“The first bill, the Encouraging Public Offerings Act, ensures that all companies – rather than just emerging growth companies – are allowed to ‘test the waters’.  This bill will make listing on exchanges more attractive, strengthening our financial markets and providing main street investors more opportunities to grow their nest egg.  The second, the Small Entity Update Act, will address longstanding concerns that numerous SEC rules do not appropriately balance the SEC’s mandates to protect investors and facilitate capital formation.  This bill will result in a better understanding of regulatory costs on small entities and ensure that the SEC modernizes its criteria for defining them, leading to a more targeted regulatory framework for these entities.

“These impactful bills will ease the regulatory burden on growing companies and encourage more companies to go public, providing better information to interested investors.  I thank my colleagues for their strong support of my legislation.”

Background

H.R. 2793, the Encouraging Public Offerings Act

This bipartisan bill codifies Rule 163B under the Securities Act by allowing an issuer to communicate with potential investors to determine interest in a securities offering, either before or after the filing of a registration statement (i.e. test the waters).
H.R. 2792, the Small Entity Update Act

The bipartisan bill would direct the Securities and Exchange Commission to conduct a study, followed by a rulemaking consistent with the results of such study, including defining the term “small entity” under the Regulatory Flexibility Act.