McHenry Testifies in Support of Expanding Access to Capital Act
H.R. 2799 builds on the bipartisan JOBS Act by cutting red tape for investors, job creators, and entrepreneurs trying to access our capital markets
Washington,
March 5, 2024 -
Today, the Chairman of the House Financial Services Committee, Patrick McHenry (NC-10), appeared before the House Committee on Rules to speak in support of H.R. 2799, the Expanding Access to Capital Act. H.R. 2799 will facilitate capital formation by strengthening our public markets, helping small businesses and entrepreneurs, and creating new opportunities for all investors.
Watch Chairman McHenry’s testimony here.
Read Chairman McHenry’s testimony as prepared for delivery:
“Chairman Cole and Ranking Member McGovern, thank you for the opportunity to testify today on my bill, H.R. 2799, the Expanding Access to Capital Act.
“In 2012, a divided Congress passed the Jumpstart Our Business Startups Act—or JOBS Act—and President Obama signed it into law that April.
“The JOBS Act started in the House Financial Services Committee. It addressed several key issues that prevented our capital markets from achieving their full potential.
“The JOBS Act right-sized overly burdensome regulatory barriers and provided new opportunities for entrepreneurs to access funding and grow their ideas into a business.
“Now more than a decade later, we know that the JOBS Act was successful. Our economy is better off because of it.
“However, in 2024, our securities laws remain imperfect. There are commonsense steps Congress can take to build on the JOBS Act. These steps will continue to fuel economic growth through our financial markets.
“I am proud of the bipartisan legislation this House already passed in 2023 to support capital formation, but our work is far from finished.
“Fortunately, the House Financial Services Committee remains committed to finding both simple and innovative solutions to ensure U.S. capital markets remain the envy of the world.
“H.R. 2799, the Expanding Access to Capital Act, will do just that. This bill is designed to address three key facets of our capital markets. It will strengthen our public markets, help small businesses and entrepreneurs, and create new opportunities for everyday investors to build wealth through our private markets.
“First, our public markets. This bill aims to reverse the dangerous decline in initial public offerings, or IPOs, in the United States.
“Some believe the best way to increase IPOs is to force companies to go public by eroding our private markets. However, Republicans remain committed to market incentives that make going public more attractive. We do this by reducing the burdens that force firms to spend more on compliance than growth.
“H.R. 2799 expands certain benefits created for emerging growth companies, or EGCs, in the JOBS Act’s IPO on-ramp to other issuers. The JOBS Act’s IPO on-ramp demonstrated that certain compliance burdens can be minimized or delayed without weakening investor protection.
“Expanding these benefits is a commonsense approach to improve U.S. public markets by extending the IPO on-ramp, which already has a proven track record of success.
“Second, H.R. 2799 would democratize fundraising for small businesses and entrepreneurs across the country. As small businesses account for 99.9% of U.S. businesses, Congress must be responsive to their needs.
“One of the main concerns we have heard from small business owners and the funds dedicated to supporting start-ups is the need to expand access to investment capital outside traditional financial centers.
“H.R. 2799 accomplishes this goal by permitting venture funds to raise more money from more investors. This will give those funds and small businesses new opportunities to gain exposure to a vastly different group of investors.
“Finally, H.R. 2799 creates new, innovative opportunities for everyday investors to save and build wealth through our private markets. Currently, the Accredited Investor definition locks most Americans out of private markets by reserving these investments—where returns are often the highest—for those who are already wealthy. This legislation reforms the antiquated accredited investor definition so wealth is no longer the primary measure of sophistication.
“U.S. capital markets are too important to neglect, and we must prioritize needed improvements for the benefit of both American entrepreneurship and everyday American investors. I am proud of the bipartisan work Congress did a little over 10 years ago to pass the JOBS Act and strengthen our capital markets.
“I believe we can and should continue the JOBS Act’s legacy of bolstering our capital markets, and I encourage my colleagues to support H.R. 2799.”
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