At the end of last week, the House Financial Services Committee approved two bills, H.R. 3623 and H.R. 4164.
H.R. 3623, titled the Improving Access to Capital for Emerging Growth Companies Act, was introduced by Stephen Fincher (R-TN). H.R. 3623 builds on the successes of Title I of the JOBS Act, which created a new class of publicly traded companies known as Emerging Growth Companies (EGCs). The bill reduces burdensome Securities and Exchange Commission (SEC) registration and disclosure requirements to help EGCs access the capital markets more efficiently, streamline the Initial Public Offering process and allow EGCs to deploy their assets to grow and create jobs. Most significantly, the bill would reduce the 21-day period (during which a confidential submission must be made public) to 15 days.
H.R. 4164, titled the Small Company Disclosure Simplification Act, was introduced by Robert Hunt (R-VA). H.R. 4164 provides a voluntary exemption for all EGCs and other issuers with annual gross revenues under $250 million from the SEC’s onerous requirements to file their financial statements in an interactive data format knows as eXtensible Business Reporting Language (XBRL). The bill also requires the SEC to conduct a cost-benefit analysis on the XBRL requirement and report to Congress within one year after enactment. H.R. 4164 allows small businesses to spend more time focusing on expanding and creating jobs rather than on redundant SEC compliance requirements.