Garrett bills to reduce regulatory burdens and hold government accountable pass Financial Services Committee
June 17,2016
Ridgewood NJ, Rep. Scott Garrett (NJ-05), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, released the following statement after the House Financial Services Committee passed two bills he introduced; H.R. 5429, the SEC Regulatory Accountability Act and H.R. 4852, the Private Placement Improvement Act of 2016. In addition to Garrett’s bills, the subcommittee passed seven additional bills that Garrett guided through his subcommittee:
“Last month’s abysmal jobs report proves again that top-down, Washington-first economic policies are failing the American people. If we want to revitalize the economy, Congress needs to promote investment and reduce red tape by making it easier for investors and businesses across America to access capital and grow. Today the Financial Services Committee took steps to do that by passing two bills I sponsored and seven more from the Capital Markets subcommittee.
“My bills do two simple things. First, every business and every family does their own version of a cost-benefit analysis when making financial decisions, and the SEC will have to do the same under the SEC Regulatory Accountability Act. Second, the SEC needs to make sure it is implementing the JOBS Act to jumpstart the economy instead of imposing additional restrictions on investment. The Private Placement Improvement Act is designed to fix that problem.”
So far this Congress, 10 bills from Garrett’s subcommittee have been signed into law by President Obama—all with bipartisan support. With the passage of 9 bills today, 39 total bills from the Capital Markets subcommittee have been approved by the full committee this Congress.
Background:
H.R. 5429, the SEC Regulatory Accountability Act
The SEC has a three-part mission, investor protection, orderly markets, and capital formation. To make sure that the SEC is not restricting the flow of capital into our economy, Garrett’s bill would require the SEC to demonstrate that any rules it proposes will help our businesses grow by performing a cost-benefit analysis.
This codifies guidance that President Obama gave to executive branch agencies and will lend credibility to the SEC’s rules. Garrett’s bill ensures that businesses and start-ups have suitable supervision from the SEC and are not burdened by costly overregulation. The SEC Regulatory Accountability Act passed the House in 2013, as H.R. 1062, by a bipartisan vote.
H.R. 4852, the Private Placement Improvement Act
The SEC has the responsibility of implementing the innovative laws Congress passed in the JOBS Act and continues to have oversight of the private offering market for securities. However, the SEC was a year and a half late in making rules for general solicitation of private offerings under Title II of the JOBS Act, and continued a poor streak when, in 2013, it came out with new proposals to impede the private offering market.
The proposals would have hindered all Reg. D issues and not just those using general solicitation. The threat of expensive regulation hanging over the heads of investors has meant that the amount of capital raised under Reg. D has not grown in the manner that other areas of the market helped by the JOBS Act have. Garrett’s bill makes a single notice of sales sufficient for exemption from regulation under Reg. D and helps the JOBS Act reach its full potential by maintaining a clear and common-sense approach to regulations for private offerings.
