GovTrack’s Bill Summary
We don’t have a summary available yet.
The bill’s title was written by the bill’s sponsor. H.R. stands for House of Representatives bill.
We don’t have a summary available yet.
The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.
The summary below was written by the House Republican Conference, which is the caucus of Republicans in the House of Representatives.
This summary can be found at http://www.gop.gov/bill/112/1/hr1965.
This bill is part of a package of legislation intended to improve small businesses’ access to capital by expanding equity financing options. The alternative method, debt financing, is prohibitively difficult in light of tightened lending standards following the financial crisis of 2008-09. Capital formation is necessary for business expansion and therefore job creation and sustained economic growth.
Under current law, companies with assets greater than $10 million that have issued a class of security held by more than 500 people must register with the SEC if those securities are to be traded on a registered exchange. These companies are therefore subject to the SEC’s reporting requirements. While the asset threshold has been increased over the years to $10 million from the $1 million level initially set in 1964, the 500 shareholder requirement has never been updated.
A press release from the bill’s sponsor, Rep. Jim Himes (D-CT), notes, the bill would “raise the number of shareholders permitted to invest in an institution before that entity must register with the SEC or ‘go public.’ Currently, both banks and private companies are subject to a 500 investor threshold, which limits the amount of capital they can raise before they must comply with the expensive reporting requirements associated with SEC registration. Additionally, in the current economic climate, successful initial public offerings (IPOs) require substantial capital and management time, initially and on an ongoing basis, especially compared to when these regulations were first put in place. [This bill would] give small companies and community banks the flexibility to remain private until they have the capital and capability to launch a successful IPO.”
H.R. 1965 would amend the Securities Exchange Act of 1934 to modify the threshold at which an issuer of securities must register with the Securities and Exchange Commission (SEC).
The bill would set the holding threshold that requires registration of a class of equity security at greater than $10 million of assets for any company and 2,000 holders of record if the company is a bank or bank holding company.
Finally, H.R. 1965 would direct the Chief Economist and the Director of the Division of Corporation Finance of the Securities and Exchange Commission (SEC) to study and make a cost-benefit analysis of shareholder registration thresholds.
The Congressional Budget Office (CBO) estimates that H.R. 1965 would have a negligible impact on the SEC’s workload, and any change in agency spending that is subject to appropriation would not be significant. Enacting H.R. 1965 would not affect direct spending or revenues, therefore, pay-as-you-go procedures do not apply
The House Democratic Caucus does not provide summaries of bills.
So, yes, we display the House Republican Conference’s summaries when available even if we do not have a Democratic summary available. That’s because we feel it is better to give you as much information as possible, even if we cannot provide every viewpoint.
We’ll be looking for a source of summaries from the other side in the meanwhile.
The bill contains the following citations to other parts of U.S. law:
The United States Code is the compilation of permanent laws enacted by Congress. Temporary and other non-permanent laws do not appear in the United States Code. (About half of the United States Code is the law itself, called positive law. The other half is merely a compilation of the laws but has no legal significance.)