Huizenga Examines Impact of Financial Regulation on Small Business Job Creation

Statement

Yesterday, Capital Markets Subcommittee Chairman Bill Huizenga (MI-02) held a hearing to examine how the Securities and Exchange Commission (SEC) has implemented the JOBS Act and what its impact has been on capital formation and job creation. During the hearing Huizenga called for the SEC to stop pursing political objectives outside its core mission and focus on creating a regulatory environment that supports innovation and job creation.

Rep. Huizenga:

* While small companies are at the forefront of technological innovation and job creation, they often face significant obstacles in obtaining funding in the capital markets. These obstacles are often attributable to the "one size fits all" securities regulations--intended for large public companies--placed on small companies when they seek to go public.

* By helping small companies obtain funding, the JOBS Act has facilitated economic growth and job creation. Additionally, the JOBS Act has fundamentally changed how the Securities and Exchange Commission (SEC) approaches securities regulation. SEC Commissioner Michael Piwowar described how the JOBS Act has changed the SEC's mission this way: "The JOBS Act requires the Commission to think of capital formation and investor protection in fundamentally different ways than we have in the past. The crowdfunding provision of the JOBS Act forces us to think outside of our historical securities regulation box and to create a different paradigm than the one we have used for the past eight decades."

* The bipartisan JOBS Act was an attempt to remedy the SEC's inaction on capital formation, and even President Obama called the law a "game changer" for entrepreneurs and capital formation. Regrettably though, the implementation of the JOBS Act by the SEC languished under the chairmanship of both Mary Schapiro and Mary Jo White. By failing to fulfill this important part of its mandated mission, the SEC is hurting small businesses, impeding economic growth and hindering the creation of new jobs.

* It is extremely troubling to me that the SEC seems more intent on pursuing highly politicized regulatory undertakings outside its core mission. Instead of working to protect investors; maintain fair, orderly, and efficient markets; as well as helping to facilitate capital formation, the SEC has been more focused on exerting societal pressure on public companies to change their behavior through disclosure rules such as the conflict minerals and pay ratio rules.

* It's time to refocus the SEC to advance a broader capital formation agenda. Let's continue to build upon the success of the bipartisan JOBS Act by further modernizing our nation's securities regulatory structure to ensure a free-flow of capital, job creation, and economic growth. It's time to get the federal government working to support innovation and reward hardworking Americans.

Key Takeaways from the Hearing:

* The bipartisan JOBS Act is working, but Congress and the SEC must do more to help small businesses, entrepreneurs and emerging growth companies access capital.

* The SEC has a responsibility to facilitate, not frustrate, capital formation and must work with Congress to eliminate unnecessary and overly burdensome regulations that are restricting access to capital.

* The Financial CHOICE Act, the Republican plan to replace the Dodd-Frank Act, included numerous provisions to expand access to capital for small businesses and entrepreneurs.

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