What is House Bill H.R. 1723?
This bill would change the Securities and Exchange Commission (SEC) Form S-1 registration statement to allow businesses to incorporate by referencing documents that they have filed with the SEC. Incorporation by reference -- which is frequently used in wills and administrative law -- in this case means that a company could reference the information it provides in Form S-1 in other legal documents going forward.Form S-1 requires companies to provide information regarding their plans to use the capital raised by issuing new securities, and give an overview of their business model along with the competition they face.
This legislation wouldn’t change any of the existing disclosure requirements, it simply allows smaller companies with SEC reporting requirements to legally connect their information found in Form S-1 to other filings.
Impact
Small companies registering securities with the SEC that would like to reference Form S-1 on other documents, the SEC.
Cost of House Bill H.R. 1723
A CBO cost estimate is unavailable.
More Information
In-Depth: Form S-1
also provides investors with detailed information about the issuance of
the securities, such as pricing and dilution to securities already on
the market. The company offering the securities is also required to
disclose business between itself and its directors, and outside
entities.
This legislation was approved by the House FInancial Services Committee on a unanimous vote of 60 to 0.
Media:
Summary by Eric Revell
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Economy
Small Business