Chamber of Commerce urges House Financial Services Committee to consider letter on June 10 markup

In anticipation of the upcoming markup in the House Financial Services Committee on June 10, the U.S. Chamber of Commerce has outlined its perspective on specific bills set to be deliberated during the session. Addressed to Chairman Hill and Ranking Member Waters, the Chamber expressed its gratitude for the opportunity to provide input on the proposed legislation.

One of the bills under consideration is H.R. 3645, also known as the Amendment for Crowdfunding Capital Enhancement and Small-business Support (ACCESS) Act. This bill seeks to amend Title III of the 2012 JOBS Act, focusing on crowdfunding regulations for emerging startups. While Title III has been instrumental in allowing start-up companies to access equity capital through crowdfunding, there have been concerns raised regarding the high transaction costs associated with this method compared to other forms of equity offerings. To address this issue, the SEC Small Business Capital Formation Advisory Committee recommended increasing the exemption threshold that triggers a requirement for financial statement reviews by external accountants for companies utilizing crowdfunding. By raising the threshold from $124,000 to $500,000, the ACCESS Act aims to make crowdfunding a more attractive and cost-effective means of raising capital for early-stage businesses.

Another bill on the docket is H.R. 3672, also known as the Securities Research Modification Act. This proposed legislation aims to extend the equity research provisions introduced by the JOBS Act to all publicly traded companies, not limited to Emerging Growth Companies (EGCs). By broadening the scope of equity research coverage among publicly listed companies, this bill seeks to address the concerning trend of diminishing research availability in the public markets. Outdated SEC and FINRA rules, compounded by international regulations such as MiFID II, have contributed to the deficit in research coverage for smaller public entities. Extending the provisions of the JOBS Act to include more companies will incentivize research coverage and enhance investor interest and trading liquidity in these stocks.

The U.S. Chamber of Commerce extends its appreciation to the Committee for considering its perspectives on the proposed bills. As the legislative process unfolds, the Chamber looks forward to collaborating with committee members to address the challenges and opportunities presented by the evolving financial landscape. Through constructive dialogue and proactive engagement, stakeholders can work together to foster a regulatory environment conducive to sustainable economic growth and innovation.