Patrick McHenryChairman

Washington, September 20, 2011 -

Five bills that would make it easier for small companies to raise money and create jobs will be on the agenda Wednesday during a hearing of the Capital Markets and Government Sponsored Enterprises Subcommittee.

Raising capital is necessary for companies to create jobs, and the Financial Services Committee has
focused its attention on promoting capital formation since the beginning of the 112^th Congress.  In November 2010, Chairman Spencer Bachus and Majority Whip Kevin McCarthy, a member of the Committee, urged the Securities and Exchange Commission (SEC) to take a number of steps that would help small companies raise capital.  Two of those proposals advocated by Chairman Bachus and Rep. McCarthy are now included in the Obama Administration’s plan to help facilitate small business capital formation.

“Our Committee continues to focus on breaking down government barriers to job creation and economic growth.  New and existing small businesses should not be hindered from accessing capital markets because of cumbersome and outdated regulations,” said Chairman Bachus.

Capital Markets and Government Sponsored Enterprises Subcommittee Chairman Scott Garrett said, “All across the U.S., American entrepreneurs are waiting to unleash their potential on the U.S. economy, but the federal government continues to stand in the way with burdensome and outdated capital formation rules.  Rather than tying up financial capital with unnecessary regulations, we need to liberate America’s entrepreneurs so they can do what they do best—create jobs and grow our economy.  As part of the ongoing effort by House Republicans to tear down barriers to economic growth and job creation, the Capital Markets Subcommittee will hold a hearing to discuss a number of bills that provide small businesses the flexibility they need to raise capital and invest in their businesses.”

The five legislative proposals to be discussed by the subcommittee will modernize SEC regulations and ensure the capital markets can be used as a vehicle for small companies to obtain the financing they need to grow, hire and invest. The bills are:

• H.R. 2167, the Private Company Flexibility and Growth Act, introduced by Rep. David Schweikert. The legislation would raise the threshold for mandatory registration with the SEC from 500 shareholders to 1,000 shareholders.  This would mark the first time the shareholder threshold has been adjusted since it was adopted in 1964.
• H.R. 2940, the Access to Capital for Job Creators Act, introduced by Rep. Kevin McCarthy. The legislation would remove the regulatory ban that prevents small, privately held companies from using advertisements to solicit investors for private offerings.
• H.R. 2930, the Entrepreneur Access to Capital Act, introduced by Rep. Patrick McHenry. The legislation would permit “crowdfunding” to finance new businesses by permitting companies to accept and pool donations up to $5 million without registering with the SEC.
• The Small Company Job Growth and Regulatory Relief Act, draft legislation to be introduced by Rep. Stephen Fincher.  The proposal would expand the exemptions available to small companies from certain costly reporting requirements of the Sarbanes-Oxley Act.
• H.R. 1965, introduced by Rep. Jim Himes. The legislation would modify regulations concerning registration and deregistration of small bank holding companies under securities laws.