McHenry to SEC: Complete Regulation Crowdfunding Improvements to Support Small Businesses and Our Economic Recovery
Washington,
March 12, 2021 -
Today, the Republican leader of the House Financial Services Committee, Patrick McHenry (NC-10), sent a letter to the Acting Chair of the Securities and Exchange Commission (SEC) urging her to uphold the Commission’s independence and follow through on necessary improvements to the Regulation Crowdfunding rules. These changes will support small businesses as they work to recover from the COVID-19 pandemic and create jobs in their communities, and should not be delayed or stopped.
Ranking Member McHenry writes: “The burdensome and prescriptive nature of Regulation Crowdfunding has stalled capital formation and investment opportunities. This complexity has prevented small business from accessing much needed capital for too long and hindered the development of innovative products and services. Further delaying these needed changes will only hurt market participants actively working to comply with the finalized amendments and will impede opportunities for small businesses.”
Read Republican Leader McHenry’s full letter to the SEC:
Dear Acting Chair Lee,
On January 20, 2021, President Biden issued an executive order (EO) directing federal agencies and executive departments to freeze certain regulations pending review. As an independent agency, the Securities and Exchange Commission (Commission) should resist the political pressure to comply with the EO in order to best serve its mission – to protect investors; maintain fair, orderly and efficient markets; and facilitate capital formation. Indeed, former SEC Chair Mary Jo White emphasized the importance of the SEC’s independence stating, “the agency does not report or answer to the White House or any part of the administration.” To be clear: compliance with the EO would call into question the Commission’s status and structure as an independent agency.
In particular, I am concerned about the effect of any regulatory freeze on necessary changes to the Regulation Crowdfunding rules. As I have communicated with the Commission on multiple occasions, the burdensome and prescriptive nature of Regulation Crowdfunding has stalled capital formation and investment opportunities. This complexity has prevented small business from accessing much needed capital for too long and hindered the development of innovative products and services. Further delaying these needed changes will only hurt market participants actively working to comply with the finalized amendments and will impede opportunities for small businesses.
The improvements made to Regulation Crowdfunding will ensure that crowdfunding can be better utilized as intended by the JOBS Act of 2012. I urge the Commission to uphold its independence and provide continuity for America's entrepreneurs, small businesses, and startups that are critical to our strong economic recovery.
Sincerely,
Patrick McHenry
Ranking Member
Committee on Financial Services
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