Encouraging Employee Ownership Act of 2015

Floor Speech

BREAK IN TRANSCRIPT

Mr. ISSA. Mr. Chair, my amendment quite simply makes this bill better. Since 2011, almost 5 years, virtually every single public company has reported financial statements to the SEC by electronic, searchable, readable data format, often called XBRL.

This searchable data allows the investor community to look through data in a way they never could under paper, and its accuracy is as good or as bad as the source material that goes onto that paper.

Now, both the author of the bill and myself agree on one thing: printing paper and sending electronic format is outdated. There is no question at all that the SEC, the Securities and Exchange Commission, is long overdue to convert to an all-electronic filing.

As a matter of fact, for most of the people that will be listening and watching today, they are already electronically filing their income tax and then printing out a paper copy to stick in a drawer. The idea that a public company who spends two, three, four or more millions of dollars in compliance every year would file paper, and then that paper would be electronically scanned, sent to India, converted to data, and then analyzed by the investment community is truly about the most backwards way one could imagine doing it.

What my amendment to Mr. Hurt's bill that is enclosed in the larger bill says is, we understand that some small startup companies, even though they are going public, may have a difficult time transitioning, and the idea that they would be allowed to go optional, as Congressman Hurt's bill intends, is acceptable if, in fact, it is for a short period of time, as the eventual transition to all-electronic filing goes forward.

The many thousands of companies who have been successfully filing electronically and who have software that makes it simply a push of a button, coming off of this would, in fact, be a giant step backwards.

As we go toward all-electronic filing and the elimination of the absurdity of paper as the standard of the Securities and Exchange Commission, we only ask that this provision be one that is focused on new companies for a short period of time. That is the reason the amendment takes the 5-year exemption to all companies to be simply an exemption to new IPOs; in other words, companies that may not at the time of their public offering already have the software in place to do this filing.

BREAK IN TRANSCRIPT

Mr. ISSA. Mr. Chairman, I yield 30 seconds to the gentlewoman from New York (Mrs. Carolyn B. Maloney), a senior member of the Committee on Financial Services.

BREAK IN TRANSCRIPT

Mr. ISSA. Mr. Chairman, may I inquire as to how much time each side has remaining?

BREAK IN TRANSCRIPT

Mr. ISSA. Mr. Chairman, in closing, I have been on the board of a public company, of multiple public companies. I have taken a company public, as have many of the supporters of this amendment. I know the cost of taking a company public. It is in the millions. It is not in the thousands.

I also know that whether it is Bernie Madoff or Enron or WorldCom or a host of much smaller companies that have deceived the public, the Securities and Exchange Commission has an obligation to continuously improve the material available to the financial community and to make sure that it is equally searchable and equally accessible to the large and small investor. That is the reason that I strongly believe that elimination of paper, not covered in this bill, should not be replaced by elimination in any way of the reporting under the digital reporting requirements of the Securities and Exchange Commission.

I would urge Members that this is narrowly focused, much more narrow than the bill itself. It recognizes that if somebody wants to go public and not do this, they would have the ability to do so. As Mrs. Maloney said, for 60 percent of the reporting companies to be exempted out would begin to rot away the underpinnings of a 5-year-old program that has been successful.

I would hope people would realize that it is not a necessary, a draconian backwards step to before 2011. In fact, from my information and from my experience, it is a de minimis cost to simply include a digital format that the world can look at and evaluate quicker and with greater accuracy.

I would like to thank the gentleman from Texas (Mr. Hensarling), the chairman of the full committee, for bringing a combined bill that I generally approve of and hope that this amendment will make it a bill I can vote for.

Mr. Chairman, I yield back the balance of my time.

BREAK IN TRANSCRIPT

Mr. ISSA. Mr. Chairman, I demand a recorded vote.

BREAK IN TRANSCRIPT

Source