Enhancing Multi-Class Share Disclosures Act

Floor Speech

Mr. Speaker, I rise in support of H.R. 2795, the Enhancing Multi- Class Share Disclosures Act, sponsored by the gentleman from New York.

This bill closes documented gaps around multi-class governance structures. Multi-class governance structures are those where corporate insiders or beneficial owners retain an outsized amount of voting power relative to their shares.

These structures, while they may add value, can pose significant risks to other investors, making sunlight ever more important for investors. Specifically, these structures limit investors' ability to influence management, direct strategy, and hold misaligned boards accountable.

Under current rules, the difference between a corporate insider's voting power and their ownership interest, regardless of how large that gap may be, is often disclosed in ways that are difficult for a retail investor to fully comprehend.

Accordingly, the SEC Investor Advisory Committee recommended that the SEC amend its rules to ensure that this gap is better identified and quantified for investors via a disclosed ratio. This commonsense bill adopts this recommendation to ensure investors have the clearest information available to make the best decision for themselves.

This bill is supported by the Council of Institutional Investors, whose members manage trillions of dollars of assets for people all across America.

Mr. Speaker, I urge my colleagues to support this bill, and I reserve the balance of my time.

This bill is pro-transparency, pro-investor, pro-corporate accountability. It strengthens investors' and other stakeholders' ability to understand the risks associated with investing in companies that have dual-class share structures.

Mr. Speaker, I again urge my colleagues to support this bill, and I yield back the balance of my time.

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