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Washington DC, the Federal Reserve Board just released a study showing Trump policies have caused a surge of wealth. The net worth of all Americans rose to $128 TRILLION through September of this year. That’s up almost 30% in four years. And that was before the Doordash and Airb&b IPOs!
Chairman Scott Garrett Opening Statement for Hearing Entitled “Legislative Proposals to Enhance Capital Formation, Transparency, and Regulatory Accountability”
May 17, 2016
the staff of the Ridgewood blog
Ridgwood NJ, Capital Markets and Government-Sponsored Enterprises Subcommittee Chairman Scott Garrett (NJ-05) delivered the following remarks at a hearing entitled, “Legislative Proposals to Enhance Capital Formation, Transparency, and Regulatory Accountability”:
Congressman Scott Garrett’s opening remarks as prepared for delivery:
Today, the Subcommittee meets to examine three important pieces of draft legislation that continue our work over the last five years to modernize our nation’s securities laws, promote transparency and competition in our capital markets, and bring real reform and accountability to the SEC’s rulemaking process
Recent polls indicate that roughly two-thirds of Americans believe our country is headed in the wrong direction, and a declining number of people believe that their children will be better off financially than they have been
So despite the big promises that have come with granting vast and in some cases unlimited authority to the federal bureaucracy, most Americans aren’t buying the argument that a bigger Washington leads to a bigger paycheck – or even to a paycheck at all
Fortunately, our Subcommittee has for five years tried an alternative approach which seeks to empower entrepreneurs, investors, and small businesses – not bureaucrats
This approach has led to some legislative successes – most notably with the JOBS Act of 2012 – but maybe more importantly it has led Congress and regulators to think in different ways than they historically have
So today we continue our important work with these three pieces of legislation:
First, we will consider the SEC Regulatory Accountability Act, which would require that the SEC determine that the benefits of any regulation they are considering actually outweigh its economic and regulatory costs
Even President Obama – through executive orders issues in 2011 – has recognized the importance of economic analysis in rulemakings; this legislation would merely codify much of the President’s executive order for the SEC
Second, we have the Investment Advisers Modernization Act from Mr. Hurt
This is a long overdue piece of legislation that would allow private capital to continue to play a critical role in our economy, and which reduces many of the unnecessary bureaucratic requirements that have the effect of starving middle market businesses of the capital that they need
Third, Mr. Duffy has put forward the “Proxy Advisor Form Reform Act of 2016” which would – for the first time in memory – provide some much needed sunlight to the way in which proxy advisory firms develop and distribute their advice
This Subcommittee has led the charge in Congress for reform of the proxy advisory industry, and this draft legislation is the next step in those efforts
So I want to thank all of the sponsors for their hard work on all of these bills and I look forward to hearing from our witnesses.
Chairman Scott Garrett Opening Statement for Hearing Entitled
WASHINGTON, D.C. – Capital Markets and Government-Sponsored Enterprises Subcommittee Chairman Scott Garrett (NJ-05), delivered the following remarks at a hearing entitled “The JOBS Act at Four: Examining Its Impact and Proposals to Further Enhance Capital Formation”:
Congressman Scott Garrett’s opening remarks as prepared for delivery:
It’s not very often that Congress can look back at a major piece of legislation and be able to measure the tangible, positive impact it is having on peoples’ lives and on our economy
Too often, we find ourselves – particularly on this Committee – counting up the costs of misguided Washington mandates and comparing them with the phantom benefits promised by the bureaucratic class
Fortunately, that is not the case today
The Jumpstart our Business Startups – or “JOBS” Act – signed into law four years ago this month has by most measures been a resounding success for our economy and the future of innovation in America
The JOBS Act did this not by creating new federal mandates or spending taxpayer money on wasteful programs, but by empowering entrepreneurs and innovators who were struggling under a regulatory regime that was better suited for 1934 than it was for 2016
Just consider some of the following:
· The JOBS Act has led to a resurgence in the initial public offering (IPO) market, with some 85% of IPO’s since April 2012 coming from emerging growth companies
· Companies have raised some $50 billion under the new Reg D provision that allows business to solicit an offering to the general public
· While the newly modernized “Reg A+” is only a year old, business are already beginning to issue securities under this exemption
· And recent reports indicate that the SEC has already received up to 30 applications for portals under the new crowdfunding rules, which are set to go live next month
So while it’s clear that many parts of the JOBS Act are working as intended, the point of this hearing is not to pat ourselves on the back and say “job well done”
For starters, because the Senate tried its best back in 2012 to neuter the crowdfunding title and the SEC has taken some liberties with other rulemakings, the JOBS Act needs some “fixing”
So I want to thank the gentleman from North Carolina, Mr. McHenry, for putting forward the “Fix Crowdfunding Act” which makes some necessary changes to help ensure Title III reaches its full potential
Additionally, I have put forward a bill – the Private Placement Improvement Act – that will prohibit the SEC from implementing burdensome new rules for Reg D issuers that were uncalled for by the JOBS Act
We’ll also consider two other bills today
Mr. Emmer has introduced an innovative bill that would create a safe harbor for so-called “micro offerings”, and Mr. McHenry has another bill which would raise the threshold for when venture capital funds would have to register with the SEC
In addition to these targeted fixes, I’m also interested in hearing from our witnesses about further areas that Congress should be addressing in order to maintain the competitiveness of our capital markets
For example, we should be exploring the cumulative burdens that come with being a public company – including, unfortunately, some of the ridiculous disclosure requirements of Dodd-Frank as well as the outsized influence that proxy advisory firms have in the corporate governance arena
It’s also time to think more about the lack of research and liquidity that exists for certain public companies, and whether the equity research Global Settlement of 2003 swung the pendulum too far and has led to a dearth of research for small cap stocks
These are all important questions, and I look forward to hearing from our witnesses today.