Directing the Securities and Exchange Commission to Allow Certain Issuers to be Exempt from Registration Requirements
Floor Speech
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I would like to start off by thanking Representative Sinema and Representative Hollingsworth for working together to craft bipartisan legislation that will help smaller public companies raise the funds necessary to grow and thrive.
Specifically, H.R. 2864, the Improving Access to Capital Act, would narrowly expand the relief that we provided in the Jumpstart Our Business Startups Act, the JOBS Act, to allow public companies to raise money under Regulation A-Plus.
Currently, Regulation A-Plus allows private companies to raise up to $50 million in capital by selling unregistered but freely tradable stock to the public as a quicker and less expensive alternative to a fully registered securities offering.
Extending Regulation A-Plus eligibility to public companies would provide them with an additional efficient method of raising a small fixed amount of capital. To be eligible to use this faster and cheaper fundraising alternative, public companies must be up to date in their public filings with the Securities and Exchange Commission.
In addition, public companies must comply with all of the other regulatory requirements in Regulation A-Plus, including SEC approval or qualification of the offering, disclosure of the offering information to investors, and limitations on sales per investor.
Importantly, bad actors who have committed certain felonies, misdemeanors, or other misconduct within the past 5 years are disqualified from using Regulation A-Plus.
These restrictions help ensure that investors in Regulation A-Plus offerings are informed about their purchases and protected from fraud.
Mr. Speaker, I support H.R. 2864 for providing targeted relief to public companies that balances their need to raise capital with the protection of their investors.
I remain concerned that the Financial Services Committee has adopted a piecemeal approach to private and public market regulation.
Going forward, I hope that we thoughtfully review the securities laws to ensure that our legislative efforts appropriately incentivize companies to become public.
Again, I want to thank the bill's sponsors, especially Ms. Sinema, for their work on this bipartisan piece of legislation.
Mr. Speaker, I encourage my colleagues to join me in supporting H.R. 2864, and I reserve the balance of my time.
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