Patrick McHenryChairman

Washington, October 7, 2011 - H.R. 2940, introduced by Rep. Kevin McCarthy, removes the regulatory ban that prevents small, privately held companies from using advertisements to solicit investors for private offerings. Securities laws not only prohibit general solicitation and advertising but require investors to have an existing relationship with the company in order to meet SEC exemption requirements. This ban has limited the ability of small businesses to raise capital.

On October 5th, the Capital Markets and Government Sponsored Enterprises Subcommittee approved H.R. 2940 by a voice vote.

After Subcommittee passage, Majority Whip McCarthy said, “Small businesses are the engine of the American economy. In order to flourish, entrepreneurs and small business owners need fewer regulatory restrictions and greater access to capital to start and grow companies and get more people working. Unfortunately, onerous federal regulations dampen both innovation and access to capital because of the restrictions and compliance burden they place on these enterprises. That’s why I have introduced HR 2940, the Access to Capital for Job Creators Act, which removes the solicitation prohibition contained in Rule 506 of Regulation D of the Securities Act. This will give small businesses another way to access private capital by allowing them to widely seek funds from the entire pool of wealthy SEC accredited investors without requiring them to go through the full SEC registration process.”