Regulatory Changes for Smaller Reporting Companies (H.R. 4568)
Do you support or oppose this bill?
What is H.R. 4568?
(Updated January 31, 2017)
This bill deals with SEC registration forms and “smaller reporting companies.” Smaller reporting companies are defined as those companies that as of the last business day of their second fiscal quarter have a “public float” of less than $75 million. Public float is defined as the shares of these companies’ publicly traded common stock that is not held by management and certain large investors.
The legislation alters both S-1 and S-3 registration statements. In regard to the S-1, the bill allows smaller reporting companies to automatically update information when something changes, saving these businesses nearly 1,000 hours of labor. In regard to the S-3, the bill would allow certain smaller reporting companies to register, with the SEC, a primary securities offering exceeding one-third of the company’s public float. The bill also changes S-3 registration in a second way by allowing a second group of smaller reporting companies (those without listed and registered “common equity securities”) to register a primary securities offering not exceeding one-third of their public float.
Argument in favor
Gives smaller public companies access to many of the capital-raising advantages currently enjoyed only by larger companies.
Argument opposed
Allows companies too much manipulation of data, making them appear, to both investors and the SEC, as something they’re potentially not.
Impact
This bill affects smaller reporting companies, and by extension investors and both American and global financial markets.
Cost of H.R. 4568
A CBO cost is unavailable.
Additional Info
Of Note:
- H.R. 4200, the "SBIC Advisers Relief Act of 2014"
- H.R. 4521, the "Community Institution Mortgage Relief Act of 2014"
- H.R. 4554, the "Restricted Securities Relief Act of 2014"
- H.R. 4571, to direct the Securities and Exchange Commission to revise its rules so as to increase the threshold amount for requiring issuers to provide certain disclosures relating to compensatory benefit plans
- H.R. 4569, the "Disclosure Modernization and Simplification Act of 2014"
- H.R. 4570, the "Private Placement Improvement Act of 2014"
- H.R. 4565, the "Startup Capital Modernization Act of 2014"
- H.R. 4564, the "Equity Crowdfunding Improvement Act of 2014"
- H.R. 2629, the "Fostering Innovation Act of 2013"
- H.R. 1779, the "Preserving Access to Manufactured Housing Act of 2013"
- H.R. 2673, the "Portfolio Lending and Mortgage Access Act"
- H.R. 3211, the "Mortgage Choice Act of 2013"
- H.R. 4466, the "Financial Regulatory Clarity Act of 2014"
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