On March 9, 2017, the House Financial Services Committee and Senate Banking Committee conducted their first legislative mark-ups in the new Congress and approved bipartisan bills to amend several SEC-related laws. Observers have speculated that the simultaneous advancement of this package of bipartisan bills in both chambers may indicate that key legislators are open to pursuing financial reform efforts in narrowly focused stages rather than through comprehensive legislation.
The approved bills are reintroduced versions of bills that received consideration previously — in some cases receiving near-unanimous approval by the full House — without final enactment. They are summarized below.
- H.R. 910 / S. 327: The Fair Access to Investment Research Act of 2017. This legislation would require the SEC to provide a safe harbor for broker-dealers to publish research reports regarding exchange-traded funds without the reports being considered “offers” for purposes of the Securities Act of 1933. The House passed a previous version of the bill in 2016 by a 411-6 vote.
- H.R. 1219 / S. 444: Supporting America’s Innovators Act of 2017. This bill would increase the limit on the number of individuals who can invest in certain smaller venture capital funds before those funds must register with the SEC as investment companies under the Investment Company Act of 1940 from 100 to 250. The House passed a previous version of the bill in 2016 by 388-9.
- H.R. 1257 / S. 462: Securities and Exchange Commission Overpayment Credit Act. This bill would allow SEC-registered national securities exchanges to offset overpayments to the SEC in fees and assessments against future fees. Similar legislation passed the House Financial Services Committee unanimously in 2016 but did not receive a final disposition before the full chamber.
- H.R. 1366 / S. 484: U.S. Territories Investor Protection Act of 2017. This legislation would subject investment companies operating in Puerto Rico and all the U.S. territories to the same federal consumer protections applicable to investment companies throughout the rest of the United States, closing an exemption dating from 1940, when lawmakers considered U.S. territories too remote for the implementation of investor protections. In 2016, the House approved a previous version of the bill by voice vote.
- H.R. 1343 / S. 488: Encouraging Employee Ownership Act. This legislation would raise the regulatory threshold for the dollar amount of securities that private employers can sell as part of an employee compensatory benefit plan before needing to provide SEC Rule 701 disclosures from $5 million to $10 million. The House approved a previous version of the bill 265-159.
The House Financial Services Committee also approved H.R. 1312: The Small Business Capital Formation Enhancement Act, bipartisan legislation that would affirmatively require the SEC to consider and respond to any findings and recommendations put forth by the SEC’s Government-Business Forum on Small Business Capital Formation. The Senate Banking Committee did not consider the bill, although a committee spokesperson indicated that its inclusion in a future mark-up is expected. A previous version of the bill passed the House in 2016 by 390-1.
The bills are not yet scheduled for consideration by either chamber in full.