This week, the House reached agreement on “JOBS and Investor Confidence Act of 2018”, a 32-piece package of capital-formation legislation designed to help America’s small businesses and entrepreneurs and protect investors. The package was announced on July 16 by House Financial Services Committee Chairman Jeb Hensarling (R-TX) and Ranking Member Maxine Waters (D-CA). The bill passed the House the following day by a near unanimous 406-4 vote.
You don’t have to search hard to find proposals from Nasdaq’s Revitalize blueprint within the package, related to Initial Public Offerings (IPOs), 10-Q filings, equity research and other regulatory issues. A sampling of the bipartisan bills in the package are as follows. You can find more information in the House Financial Services Committee press release here.
H.R. 3903 – Encouraging Public Offerings Act of 2017 – Sponsored by Rep. Ted Budd (R-NC) and cosponsored by Rep. Gregory Meeks (D-NY), amends the Securities Act of 1933 to expand to all public companies certain provisions of Title I of the Jumpstart Our Business Startups (JOBS) Act, which previously applied only to an Emerging Growth Company (EGC). Specifically, the legislation allows issuers to submit to the SEC for confidential review, before publicly filing, draft registration statements for IPOs and for follow-on offerings within one year of an IPO. Additionally, this bill allows all companies to “test-the-waters” before filing an IPO, which means they may meet with qualified institutional buyers and other institutional accredited investors to gauge those investors’ interest in the offering.
H.R. 5877 – Main Street Growth Act – Sponsored by Rep. Tom Emmer (R-MN), amends the Securities Exchange Act of 1934 to allow for the registration of venture exchanges with the SEC to provide a venue that is tailored to the needs of small and emerging companies and offers qualifying companies one venue in which their securities can trade.
H.R. 5970 – Modernizing Disclosures for Investors Act – Sponsored by Rep. Ann Wagner (R-MO), requires the SEC to provide a report to Congress with a cost-benefit analysis of EGCs' use of SEC Form 10-Q, including the costs and benefits to investors and other market participants of the current requirements for reporting on Form 10-Q, as well as the expected impact of the use of alternative formats of quarterly reporting for EGCs. The bill also directs the SEC to report to Congress with recommendations for decreasing costs, increasing transparency, and increasing efficiency of quarterly financial reporting by EGCs.
The JOBS and Investor Confidence Act of 2018 is expected to go to the Senate for a vote in the upcoming weeks, where it will need 60 votes in order to advance to the President’s desk.
Nasdaq continues our commitment to advocating on behalf of our publicly-traded companies as well as investors. We are encouraged by these legislative developments, and look forward to further engaging with regulators and Congress to reinvigorate the U.S. capital markets.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.