Senate Committee on Banking, Housing and Urban Affairs member Mike Rounds (R-SD) introduced six bills intended to reduce regulatory burdens for investors and small businesses attempting to raise capital.
- The Alleviating Stress Test Burdens to Help Investors Act would remove bank-centric stress testing requirements and instead authorize the SEC and CFTC to conduct stress tests;
- The Modernizing Disclosures for Investors Act would require the SEC to conduct a study intended to simplify the quarterly financial reporting system for small companies;
- The Improving Investment Research for Small and Emerging Issuers Act would instruct the SEC to examine the causes of the current lack of investment research on small companies;
- The Developing and Empowering our Aspiring Leaders Act (DEAL Act) would direct the SEC to expand the assets that venture capitalists can invest in without the burdensome registration process;
- The Investment Adviser Regulatory Flexibility Improvement Act would require the SEC to consider “alternative methods” that will enable a business or organization to qualify as a “small business or small organization” under IAA Rule 0-7 (Small entities under the Investment Advisers Act for purposes of the Regulatory Flexibility Act); and
- The Financial Stability Oversight Council (FSOC) Improvement Act would require the Financial Stability Oversight Council “to [enhance] the transparency and procedural fairness of the non-bank systemically important financial institutions (SIFI) designation process.”
Lofchie Comment: As to the proposed Improving Investment Research for Small and Emerging Issuers Act, the SEC must find a way to allow broker-dealers to make money by publishing research. If the SEC ever thought that broker-dealers will continue to publish research on small companies even though there is no financial benefit in doing so, experience should have taught otherwise.