SBIC Advisers Relief Act of 2015
Floor Speech
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Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I am once again pleased to support this bill related to small business capital formation. This legislation has broad bipartisan support and clarifies the intent of Congress when we passed Dodd-Frank.
H.R. 432, which Representatives Luetkemeyer and Maloney worked on in a bipartisan fashion, exempts advisers to small business investment companies, or SBICs, from registration with the SEC in cases where they are inappropriately being required to do so.
Under the Dodd-Frank Act, Congress explicitly exempted advisers to SBIC funds and advisers to venture capital funds from registration. However, the SEC has interpreted the language in the act as still requiring registration if a fund's adviser advises both.
This, to me, is not consistent with the act, and I applaud the authors of this bill for solving this problem.
This bill would also exclude SBIC fund assets from the calculation of fund assets triggering the $150 million registration threshold, another provision I believe is reasonable.
The SBIC program was created in 1958 to help small businesses grow. It is a self-funded program and has provided needed capital to communities via the partnership between the Small Business Administration and private businesses.
I am also comfortable with the exemptions provided in this legislation because the SBA actively oversees SBICs, ensures compliance, and restricts leverage. I am pleased that we are able to work together in this committee to ensure the continued vitality of this longstanding program.
Last Congress, I met with an SBIC located just outside of my district, Escalate Capital Partners, which finances technology firms. Since 2010, the firm has financed 27 companies and increased its payroll by 2,000 jobs.
However, this firm is being inadvertently caught up in unnecessary SEC registration because, with SBIC assets under management being counted, it exceeds the $150 million exemption threshold we established in Dodd-Frank.
Without undermining the key systemic risk and investment protection requirements we established under Dodd-Frank, H.R. 432 provides Escalate Capital Partners and similarly situated SBICs with targeted relief.
So I applaud the bipartisan coauthors and urge Members to support this bill.
I reserve the balance of my time.
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