- TXT
-
PDF
(PDF provides a complete and accurate display of this text.)
Tip
?
114th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 114-408
======================================================================
SEC SMALL BUSINESS ADVOCATE ACT OF 2015
_______
February 1, 2016.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 3784]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 3784) to amend the Securities Exchange Act of
1934 to establish an Office of the Advocate for Small Business
Capital Formation and a Small Business Capital Formation
Advisory Committee, and for other purposes, having considered
the same, report favorably thereon with an amendment and
recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``SEC Small Business Advocate Act of
2015''.
SEC. 2. ESTABLISHMENT OF OFFICE OF THE ADVOCATE FOR SMALL BUSINESS
CAPITAL FORMATION AND SMALL BUSINESS CAPITAL
FORMATION ADVISORY COMMITTEE.
(a) Office of the Advocate for Small Business Capital Formation.--
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is
amended by adding at the end the following:
``(j) Office of the Advocate for Small Business Capital Formation.--
``(1) Office established.--There is established within the
Commission the Office of the Advocate for Small Business
Capital Formation (hereafter in this subsection referred to as
the `Office').
``(2) Advocate for small business capital formation.--
``(A) In general.--The head of the Office shall be
the Advocate for Small Business Capital Formation, who
shall--
``(i) report directly to the Commission; and
``(ii) be appointed by the Commission, from
among individuals having experience in
advocating for the interests of small
businesses and encouraging small business
capital formation.
``(B) Compensation.--The annual rate of pay for the
Advocate for Small Business Capital Formation shall be
equal to the highest rate of annual pay for other
senior executives who report directly to the
Commission.
``(C) No current employee of the commission.--An
individual may not be appointed as the Advocate for
Small Business Capital Formation if the individual is
currently employed by the Commission.
``(3) Staff of office.--The Advocate for Small Business
Capital Formation, after consultation with the Commission, may
retain or employ independent counsel, research staff, and
service staff, as the Advocate for Small Business Capital
Formation determines to be necessary to carry out the functions
of the Office.
``(4) Functions of the advocate for small business capital
formation.--The Advocate for Small Business Capital Formation
shall--
``(A) assist small businesses and small business
investors in resolving significant problems such
businesses and investors may have with the Commission
or with self-regulatory organizations;
``(B) identify areas in which small businesses and
small business investors would benefit from changes in
the regulations of the Commission or the rules of self-
regulatory organizations;
``(C) identify problems that small businesses have
with securing access to capital, including any unique
challenges to minority-owned and women-owned small
businesses;
``(D) analyze the potential impact on small
businesses and small business investors of--
``(i) proposed regulations of the Commission
that are likely to have a significant economic
impact on small businesses and small business
capital formation; and
``(ii) proposed rules that are likely to have
a significant economic impact on small
businesses and small business capital formation
of self-regulatory organizations registered
under this title;
``(E) conduct outreach to small businesses and small
business investors, including through regional
roundtables, in order to solicit views on relevant
capital formation issues;
``(F) to the extent practicable, propose to the
Commission changes in the regulations or orders of the
Commission and to Congress any legislative,
administrative, or personnel changes that may be
appropriate to mitigate problems identified under this
paragraph and to promote the interests of small
businesses and small business investors;
``(G) consult with the Investor Advocate on proposed
recommendations made under subparagraph (F); and
``(H) advise the Investor Advocate on issues related
to small businesses and small business investors.
``(5) Access to documents.--The Commission shall ensure that
the Advocate for Small Business Capital Formation has full
access to the documents and information of the Commission and
any self-regulatory organization, as necessary to carry out the
functions of the Office.
``(6) Annual report on activities.--
``(A) In general.--Not later than December 31 of each
year after 2015, the Advocate for Small Business
Capital Formation shall submit to the Committee on
Banking, Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the House of
Representatives a report on the activities of the
Advocate for Small Business Capital Formation during
the immediately preceding fiscal year.
``(B) Contents.--Each report required under
subparagraph (A) shall include--
``(i) appropriate statistical information and
full and substantive analysis;
``(ii) information on steps that the Advocate
for Small Business Capital Formation has taken
during the reporting period to improve small
business services and the responsiveness of the
Commission and self-regulatory organizations to
small business and small business investor
concerns;
``(iii) a summary of the most serious issues
encountered by small businesses and small
business investors, including any unique issues
encountered by minority-owned and women-owned
small businesses and their investors, during
the reporting period;
``(iv) an inventory of the items summarized
under clause (iii) (including items summarized
under such clause for any prior reporting
period on which no action has been taken or
that have not been resolved to the satisfaction
of the Advocate for Small Business Capital
Formation as of the beginning of the reporting
period covered by the report) that includes--
``(I) identification of any action
taken by the Commission or the self-
regulatory organization and the result
of such action;
``(II) the length of time that each
item has remained on such inventory;
and
``(III) for items on which no action
has been taken, the reasons for
inaction, and an identification of any
official who is responsible for such
action;
``(v) recommendations for such changes to the
regulations, guidance and orders of the
Commission and such legislative actions as may
be appropriate to resolve problems with the
Commission and self-regulatory organizations
encountered by small businesses and small
business investors and to encourage small
business capital formation; and
``(vi) any other information, as determined
appropriate by the Advocate for Small Business
Capital Formation.
``(C) Confidentiality.--No report required by
subparagraph (A) may contain confidential information.
``(D) Independence.--Each report required under
subparagraph (A) shall be provided directly to the
committees of Congress listed in such subparagraph
without any prior review or comment from the
Commission, any commissioner, any other officer or
employee of the Commission, or the Office of Management
and Budget.
``(7) Regulations.--The Commission shall establish procedures
requiring a formal response to all recommendations submitted to
the Commission by the Advocate for Small Business Capital
Formation, not later than 3 months after the date of such
submission.
``(8) Government-business forum on small business capital
formation.--The Advocate for Small Business Capital Formation
shall be responsible for planning, organizing, and executing
the annual Government-Business Forum on Small Business Capital
Formation described in section 503 of the Small Business
Investment Incentive Act of 1980 (15 U.S.C. 80c-1).
``(9) Rule of construction.--Nothing in this subsection may
be construed as replacing or reducing the responsibilities of
the Investor Advocate with respect to small business
investors.''.
(b) Small Business Capital Formation Advisory Committee.--Title I of
the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended
by adding at the end the following:
``SEC. 40. SMALL BUSINESS CAPITAL FORMATION ADVISORY COMMITTEE.
``(a) Establishment and Purpose.--
``(1) Establishment.--There is established within the
Commission the Small Business Capital Formation Advisory
Committee (hereafter in this section referred to as the
`Committee').
``(2) Functions.--
``(A) In general.--The Committee shall provide the
Commission with advice on the Commission's rules,
regulations, and policies with regard to the
Commission's mission of protecting investors,
maintaining fair, orderly, and efficient markets, and
facilitating capital formation, as such rules,
regulations, and policies relate to--
``(i) capital raising by emerging, privately
held small businesses (`emerging companies')
and publicly traded companies with less than
$250,000,000 in public market capitalization
(`smaller public companies') through securities
offerings, including private and limited
offerings and initial and other public
offerings;
``(ii) trading in the securities of emerging
companies and smaller public companies; and
``(iii) public reporting and corporate
governance requirements of emerging companies
and smaller public companies.
``(B) Limitation.--The Committee shall not provide
any advice with respect to any policies, practices,
actions, or decisions concerning the Commission's
enforcement program.
``(b) Membership.--
``(1) In general.--The members of the Committee shall be--
``(A) the Advocate for Small Business Capital
Formation;
``(B) not fewer than 10, and not more than 20,
members appointed by the Commission, from among
individuals--
``(i) who represent--
``(I) emerging companies engaging in
private and limited securities
offerings or considering initial public
offerings (`IPO') (including the
companies' officers and directors);
``(II) the professional advisors of
such companies (including attorneys,
accountants, investment bankers, and
financial advisors); and
``(III) the investors in such
companies (including angel investors,
venture capital funds, and family
offices);
``(ii) who are officers or directors of
minority-owned small businesses and women-owned
small businesses;
``(iii) who represent--
``(I) smaller public companies
(including the companies' officers and
directors);
``(II) the professional advisors of
such companies (including attorneys,
auditors, underwriters, and financial
advisors); and
``(III) the pre-IPO and post-IPO
investors in such companies (both
institutional, such as venture capital
funds, and individual, such as angel
investors); and
``(iv) who represent participants in the
marketplace for the securities of emerging
companies and smaller public companies, such as
securities exchanges, alternative trading
systems, analysts, information processors, and
transfer agents; and
``(C) 3 non-voting members--
``(i) 1 of whom shall be appointed by the
Investor Advocate;
``(ii) 1 of whom shall be appointed by the
North American Securities Administrators
Association; and
``(iii) 1 of whom shall be appointed by the
Administrator of the Small Business
Administration.
``(2) Term.--Each member of the Committee appointed under
subparagraph (B), (C)(ii), or (C)(iii) of paragraph (1) shall
serve for a term of 4 years.
``(3) Members not commission employees.--Members appointed
under subparagraph (B), (C)(ii), or (C)(iii) of paragraph (1)
shall not be treated as employees or agents of the Commission
solely because of membership on the Committee.
``(c) Chairman; Vice Chairman; Secretary; Assistant Secretary.--
``(1) In general.--The members of the Committee shall elect,
from among the members of the Committee--
``(A) a chairman;
``(B) a vice chairman;
``(C) a secretary; and
``(D) an assistant secretary.
``(2) Term.--Each member elected under paragraph (1) shall
serve for a term of 3 years in the capacity for which the
member was elected under paragraph (1).
``(d) Meetings.--
``(1) Frequency of meetings.--The Committee shall meet--
``(A) not less frequently than four times annually,
at the call of the chairman of the Committee; and
``(B) from time to time, at the call of the
Commission.
``(2) Notice.--The chairman of the Committee shall give the
members of the Committee written notice of each meeting, not
later than 2 weeks before the date of the meeting.
``(e) Compensation and Travel Expenses.--Each member of the Committee
who is not a full-time employee of the United States shall--
``(1) be entitled to receive compensation at a rate not to
exceed the daily equivalent of the annual rate of basic pay in
effect for a position at level V of the Executive Schedule
under section 5316 of title 5, United States Code, for each day
during which the member is engaged in the actual performance of
the duties of the Committee; and
``(2) while away from the home or regular place of business
of the member in the performance of services for the Committee,
be allowed travel expenses, including per diem in lieu of
subsistence, in the same manner as persons employed
intermittently in the Government service are allowed expenses
under section 5703 of title 5, United States Code.
``(f) Staff.--The Commission shall make available to the Committee
such staff as the chairman of the Committee determines are necessary to
carry out this section.
``(g) Review by Commission.--The Commission shall--
``(1) review the findings and recommendations of the
Committee; and
``(2) each time the Committee submits a finding or
recommendation to the Commission, promptly issue a public
statement--
``(A) assessing the finding or recommendation of the
Committee; and
``(B) disclosing the action, if any, the Commission
intends to take with respect to the finding or
recommendation.
``(h) Federal Advisory Committee Act.--The Federal Advisory Committee
Act (5 U.S.C. App.) shall not apply with respect to the Committee and
its activities.''.
(c) Annual Government-Business Forum on Small Business Capital
Formation.--Section 503(a) of the Small Business Investment Incentive
Act of 1980 (15 U.S.C. 80c-1(a)) is amended by inserting ``(acting
through the Office of the Advocate for Small Business Capital Formation
and in consultation with the Small Business Capital Formation Advisory
Committee)'' after ``Securities and Exchange Commission''.
Purpose and Summary
Introduced by Representative Carney on October 21, 2015,
H.R. 3784, the SEC Small Business Advocate Act of 2015,
establishes the Office for Small Business Capital Formation
(OSBCF) and the Small Business Capital Formation Advisory
Committee (Advisory Committee) within the Securities and
Exchange Commission (SEC). The OSBCF is led by the Advocate for
Small Business Capital Formation (Advocate), who is appointed
by and reports to the Commission, with the responsibility to,
among other things:
Help small businesses resolve problems with
the SEC;
Analyze the potential impact of proposed
rules and regulations that are likely to have a
significant effect on small businesses; and
Reach out to small businesses to understand
issues related to capital formation.
The Advisory Committee provides advice to the Commission on
rules and policies related to capital formulation, securities
trading, and reporting and governance requirements for emerging
and smaller public companies.
Background and Need for Legislation
Small businesses create more jobs than any other business
sector in the United States. In 2010, the Kauffman Foundation
found that startups create an average of 3 million jobs
annually, noting that ``without startups, there would be no net
job growth in the U.S. economy.'' In the Jumpstart Our Business
Startups (JOBS) Act, Congress recognized the importance of
these companies in creating jobs and fostering economic growth.
To help these companies access the capital markets, the JOBS
Act expanded the use of private securities offerings under
Regulation A and Regulation D and created a category of issuers
known as ``Emerging Growth Companies,'' or EGCs, which are
companies that have annual gross revenue of less than $1
billion. The JOBS Act exempted EGCs from some of the most
onerous securities regulations.
Although small companies are at the forefront of
technological innovation and job creation, they often face
significant obstacles to obtaining funding in the capital
markets. These obstacles are often attributable to the
proportionately larger burden that securities regulations--
written for large public companies--place on small companies
when they seek to go public. Although no one disputes that
smart regulation is needed to maintain fair, orderly and
efficient markets, to protect investors, and to facilitate
capital formation, almost everyone agrees that excessive and
unnecessary regulation imposes costs on individual businesses
and the economy that far outweigh its benefits. But excessive
and unnecessary regulation imposes even greater costs on
startups. By passing the JOBS Act, Congress took an important
step toward easing the regulatory burden on small businesses
and startups seeking access to capital markets. H.R. 3784
facilitates the elimination and streamlining of regulations
that make it difficult for small businesses to grow their
businesses and create jobs.
The SEC has a three-part mission: to protect investors; to
maintain fair, orderly, and efficient markets; and to
facilitate capital formation. The SEC acknowledges that
promoting capital formation ``is necessary to sustain economic
growth.'' Although the SEC's budget is now almost four times
the size it was in 2000, the SEC has given short shrift to the
capital formation component of its statutory mandate--to the
detriment of entrepreneurs and start-up ventures.
Many small companies still cannot access the capital they
need to grow their businesses and create jobs. According to one
survey, 58% of respondents believe the current business
financing environment is restricting growth opportunities while
48% of respondents believe it is restricting their ability to
hire new employees. While the JOBS Act has made it easier for
these companies to go public, the JOBS Act alone was not enough
to entirely overcome the obstacles these companies face in
trying to go public. The tightening of credit, which has
resulted from both the financial crisis and the effects of
implementing the Dodd-Frank Wall Street Reform and Consumer
Protection Act, has made equity financing all the more
important as a means for small companies to obtain the capital
they need to grow and create jobs.
Currently, the responsibility to facilitate and promote
capital formation resides within the SEC's Office of Small
Business Policy (OSBP), which is housed within the SEC's
Division of Corporation Finance. OSBP answers questions on
disclosure and other issues relating to smaller public
companies, including those classified as ``smaller reporting
companies,'' and on limited, private, and intrastate offerings
of securities. OSBP also processes requests for waivers of
disqualification arising under Rule 262 of Regulation A and
Rule 505(b)(2)(iii) and Rule 506(d)(2)(ii) of Regulation D. In
addition, OSBP reaches out to smaller companies to facilitate
capital formation. These efforts include coordinating the
annual SEC Government-Business Forum on Small Business Capital
Formation, which focuses on the current status of issues and
programs related to small business capital formation.
Unfortunately, the OSBP is a functional office rather than
an advocacy office. The OSBP does not advocate for changes to
the securities laws for smaller public companies, small
businesses seeking equity capital, or investors in those
companies or businesses. The OSBP does not advance initiatives
to make equity capital more readily available to smaller
issuers. Rather than neglecting the needs of small businesses,
a permanent office dedicated to small business capital
formation within the SEC is a logical outcome of the JOBS Act
since the SEC has taken little to no action to advance the many
recommendations the agency has received from its annual
Government-Business Forum on Small Business Capital Formation
(Forum) to help small businesses and EGCs access the capital
markets.
A major purpose of the Forum is to identify unnecessary
impediments to small business capital formation and find ways
to eliminate or reduce them. Each Forum develops
recommendations for government and private action to improve
the environment for small business capital formation. But the
SEC rarely, if ever, acts on the recommendations made by the
Forum's participants, which include small business executives,
venture capitalists, government officials, trade association
representatives, lawyers, accountants, academics and small
business advocates. For example, the crowdfunding and
Regulation A+ provisions of the JOBS Act mirrored the Forum's
recommendations to the SEC, which the SEC had previously
ignored. Additionally, experts at these Forums have expressed
concerns about the declining number of IPOs and burdens in
complying with Regulation D. Titles I and II of the JOBS Act
directly responded to those concerns.
H.R. 3784 promotes capital formation and creates an office
within the SEC to advocate for the job creators and
entrepreneurs seeking equity capital as well as their
investors. The office will then be able to leverage the
recommendations the SEC has collected and prompt the SEC to act
on those most likely to help small businesses and EGCs access
the capital markets. At a December 2, 2015, Subcommittee on
Capital Markets and Government Sponsored Enterprises hearing,
Chris Mathieu, Chief Financial Officer of Horizon Technology
Finance, testifying on behalf of the Small Business Investor
Alliance (SBIA), stated that ``the SEC Small Business Advocate
Act strengthens the voice of small business at the SEC by
making significant changes to the way the SEC hears from small
business stakeholders; responds to stakeholder requests; and
makes recommendations to Congress and the SEC to improve the
ability of small business to access capital.'' Mr. Mathieu
further noted that ``[s]maller business investors have a much
lower threshold for pain and the SEC needs to understand the
challenges of scale when creating policy.''
At the same hearing, Brian Hahn, the chief financial
officer of GlycoMimetics, testifying on behalf of the
Biotechnology Industry Organization (BIO), stated that ``[t]he
Small Business Advocate would serve as a partner to the
existing Investor Advocate, giving small businesses an
independent voice at the SEC and helping the SEC to understand
the impact of regulatory burdens on growing companies as it
considers new compliance requirements.''
Hearings
The Subcommittee on Capital Markets and Government
Sponsored Enterprises held a hearing examining matters relating
to H.R. 3784 on December 2, 2015.
Committee Consideration
The Committee on Financial Services met in open session on
December 8, 2015 and December 9, 2015, and ordered H.R. 3784 to
be reported favorably to the House as amended by a recorded
vote of 56 yeas to 0 nays (recorded vote no. FC-85), a quorum
being present. Two amendments offered by Representative Ellison
were not agreed to by recorded votes as described below. An
amendment offered by Representative Waters was agreed to by a
voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. An
amendment offered by Representative Ellison was not agreed to
by a recorded vote of 18 ayes-38 nays (FC-83). A second
amendment offered by Representative Ellison was not agreed to
by a recorded vote of 21 ayes-35 nays (FC-84). The third and
final recorded vote was a motion by Chairman Hensarling to
report the bill favorably to the House as amended. That motion
was agreed to by a recorded vote of 56 yeas to 0 nays (Record
vote no. FC-85), a quorum being present.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 3784
will ensure that the issues related to small business capital
formation are a priority at the SEC. Additionally, H.R. 3784
will provide an independent voice for small business capital
formation, on par with the SEC's Investor Advocate, to support
the interests of small businesses and provide guidance to the
Commission on advancing a post-JOBS Act capital formation
agenda.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimates
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, January 15, 2016.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3784, the SEC
Small Business Advocate Act of 2015.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susan Willie.
Sincerely,
Robert A. Sunshine,
(For Keith Hall, Director).
Enclosure.
H.R. 3784--SEC Small Business Advocate Act of 2015
H.R. 3784 would establish the Office for Small Business
Capital Formation and the Small Business Capital Formation
Advisory Committee within the Securities and Exchange
Commission (SEC).
The office would be led by the Advocate for Small Business
Capital Formation, who would be appointed by and report to the
commission, with the responsibility to, among other things:
Help small businesses resolve problems with
the SEC;
Analyze the potential impact of proposed
rules and regulations that are likely to have a
significant effect on small businesses; and
Reach out to small businesses to understand
issues related to capital formation.
The advisory committee would provide advice to the
commission on rules and policies related to capital
formulation, securities trading, and reporting and governance
requirements for emerging and smaller public companies.
Based on information from the SEC, CBO estimates that
implementing H.R. 3784 would cost about $2 million per year for
personnel and administrative costs of the new office and for
administrative support for the advisory committee. Over the
2016-2020 period, CBO estimates that implementing the bill
would cost $7 million. Under current law, the SEC is authorized
to collect fees sufficient to offset its annual appropriation;
therefore, CBO estimates that implementing H.R. 3784 would have
a negligible effect on net discretionary costs, assuming
appropriation actions consistent with that authority.
Enacting H.R. 3784 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply. CBO
estimates that enacting H.R. 3784 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2026.
H.R. 3784 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA) and would not affect
the budgets of state, local, or tribal governments.
If the SEC increases fees to offset the costs of
implementing the bill, H.R. 3784 would increase the cost of an
existing mandate on private entities required to pay those
fees. Based on information from the SEC, CBO estimates that the
aggregate cost of the mandate would amount to about $2 million
per year over the 2016-2020 period and would fall below the
annual threshold for private-sector mandates established in
UMRA ($154 million in 2016, adjusted annually for inflation).
The CBO staff contacts for this estimate are Susan Willie
(for federal costs) and Logan Smith (for private-sector
mandates). The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
H.R. 3784 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Duplication of Federal Programs
Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015),
the Committee states that no provision of H.R. 3784 establishes
or reauthorizes a program of the Federal Government known to be
duplicative of another Federal program, a program that was
included in any report from the Government Accountability
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most
recent Catalog of Federal Domestic Assistance.
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015),
the Committee states that H.R. 3784 contains no directed
rulemaking.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section cites H.R. 3784 as the ``SEC Small Business
Advocate Act of 2015.''
Section 2. Establishment of Office of the Advocate for Small Business
Capital Formation and Small Business Capital Formation Advisory
Committee
This section amends Section 4 of the Securities Exchange
Act of 1934 to establish the Office of the Advocate for Small
Business Capital Formation. The Small Business Advocate
(Advocate) would direct and manage the Office and would report
directly to the five Commissioners. Generally, the Advocate
will assist small businesses and their investors to resolve
significant problems with the SEC or self-regulatory
organizations and identify issues and propose changes to
statutes, regulations, and rules to benefit small businesses
and their investors and facilitate capital formation. The
Advocate is tasked with a number of duties, including the
requirement to identify problems related to access to capital;
to analyze the potential impact on small businesses and small
business investors of proposed SEC and SRO rules that will have
a significant economic impact on them.
The SEC is required to issue a formal response to all
recommendations submitted by the Office. Additionally, the
Office must issue an annual report to Committees on Financial
Services and Banking and would be responsible for the annual
Government-Business Forum on Small Business Capital Formation.
H.R. 3784 also establishes the SEC Small Business Advisory
Committee (Committee). The Committee will provide the SEC with
advice on capital formation, securities trading, public
reporting, and corporate governance for ``emerging, privately
held businesses'' (``emerging companies'') and ``smaller public
companies'' (companies with less than $250 million in market
capitalization). Committee members include, but not limited to,
the Advocate and between 10-20 members appointed by the SEC
including (1) representatives of ``emerging companies'' and
``smaller public companies,'' (2) professional advisors to such
companies, (3) pre- and post-IPO investors in such companies,
(4) representatives of exchanges, Alternative Trading Systems
research analysts, and transfer agents; and (5) officers or
directors of minority or women-owned small businesses.
The Committee will also have non-voting members to include
the SEC Investor Advocate, a North American Securities
Administrators Association representative, and a representative
of the Small Business Administration. Finally, the SEC is
required to review the Committee's recommendations and promptly
issue a public statement assessing them and disclosing the
action, if any, the SEC intends to take.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italics and existing law in which no change is
proposed is shown in roman):
SECURITIES EXCHANGE ACT OF 1934
TITLE I--REGULATION OF SECURITIES EXCHANGES
* * * * * * *
securities and exchange commission
Sec. 4. (a) There is hereby established a Securities and
Exchange Commission (hereinafter referred to as the
``Commission'') to be composed of five commissioners to be
appointed by the President by and with the advice and consent
of the Senate. Not more than three of such commissioners shall
be members of the same political party, and in making
appointments members of different political parties shall be
appointed alternately as nearly as may be practicable. No
commissioner shall engage in any other business, vocation, or
employment than that of serving as commissioner, nor shall any
commissioner participate, directly or indirectly, in any stock-
market operations or transactions of a character subject to
regulation by the Commission pursuant to this title. Each
commissioner shall hold office for a term of five years and
until his successor is appointed and has qualified, except that
he shall not so continue to serve beyond the expiration of the
next session of Congress subsequent to the expiration of said
fixed term of office, and except (1) any commissioner appointed
to fill a vacancy occurring prior to the expiration of the term
for which his predecessor was appointed shall be appointed for
the remainder of such term, and (2) the terms of office of the
commissioners first taking office after the enactment of this
title shall expire as designated by the President at the time
of nomination, one at the end of one year, one at the end of
two years, one at the end of three years, one at the end of
four years, and one at the end of five years, after the date of
the enactment of this title.
(b) Appointment and Compensation of Staff and Leasing
Authority.--
(1) Appointment and compensation.--The Commission
shall appoint and compensate officers, attorneys,
economists, examiners, and other employees in
accordance with section 4802 of title 5, United States
Code.
(2) Reporting of information.--In establishing and
adjusting schedules of compensation and benefits for
officers, attorneys, economists, examiners, and other
employees of the Commission under applicable provisions
of law, the Commission shall inform the heads of the
agencies referred to under section 1206 of the
Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 1833b) and Congress
of such compensation and benefits and shall seek to
maintain comparability with such agencies regarding
compensation and benefits.
(3) Leasing authority.--Nothwithstanding any other
provision of law, the Commission is authorized to enter
directly into leases for real property for office,
meeting, storage, and such other space as is necessary
to carry out its functions, and shall be exempt from
any General Services Administration space management
regulations or directives.
(c) Notwithstanding any other provision of law, in accordance
with regulations which the Commission shall prescribe to
prevent conflicts of interest, the Commission may accept
payment and reimbursement, in cash or in kind, from non-Federal
agencies, organizations, and individuals for travel,
subsistence, and other necessary expenses incurred by
Commission members and employees in attending meetings and
conferences concerning the functions or activities of the
Commission. Any payment or reimbursement accepted shall be
credited to the appropriated funds of the Commission. The
amount of travel, subsistence, and other necessary expenses for
members and employees paid or reimbursed under this subsection
may exceed per diem amounts established in official travel
regulations, but the Commission may include in its regulations
under this subsection a limitation on such amounts.
(d) Notwithstanding any other provision of law, former
employers of participants in the Commission's professional
fellows programs may pay such participants their actual
expenses for relocation to Washington, District of Columbia, to
facilitate their participation in such programs, and program
participants may accept such payments.
(e) Notwithstanding any other provision of law, whenever any
fee is required to be paid to the Commission pursuant to any
provision of the securities laws or any other law, the
Commission may provide by rule that such fee shall be paid in a
manner other than in cash and the Commission may also specify
the time that such fee shall be determined and paid relative to
the filing of any statement or document with the Commission.
(f) Reimbursement of Expenses for Assisting Foreign
Securities Authorities.--Notwithstanding any other provision of
law, the Commission may accept payment and reimbursement, in
cash or in kind, from a foreign securities authority, or made
on behalf of such authority, for necessary expenses incurred by
the Commission, its members, and employees in carrying out any
investigation pursuant to section 21(a)(2) of this title or in
providing any other assistance to a foreign securities
authority. Any payment or reimbursement accepted shall be
considered a reimbursement to the appropriated funds of the
Commission.
(g) Office of the Investor Advocate.--
(1) Office established.--There is established within
the Commission the Office of the Investor Advocate (in
this subsection referred to as the ``Office'').
(2) Investor advocate.--
(A) In general.--The head of the Office shall
be the Investor Advocate, who shall--
(i) report directly to the Chairman;
and
(ii) be appointed by the Chairman, in
consultation with the Commission, from
among individuals having experience in
advocating for the interests of
investors in securities and investor
protection issues, from the perspective
of investors.
(B) Compensation.--The annual rate of pay for
the Investor Advocate shall be equal to the
highest rate of annual pay for other senior
executives who report to the Chairman of the
Commission.
(C) Limitation on service.--An individual who
serves as the Investor Advocate may not be
employed by the Commission--
(i) during the 2-year period ending
on the date of appointment as Investor
Advocate; or
(ii) during the 5-year period
beginning on the date on which the
person ceases to serve as the Investor
Advocate.
(3) Staff of office.--The Investor Advocate, after
consultation with the Chairman of the Commission, may
retain or employ independent counsel, research staff,
and service staff, as the Investor Advocate deems
necessary to carry out the functions, powers, and
duties of the Office.
(4) Functions of the investor advocate.--The Investor
Advocate shall--
(A) assist retail investors in resolving
significant problems such investors may have
with the Commission or with self-regulatory
organizations;
(B) identify areas in which investors would
benefit from changes in the regulations of the
Commission or the rules of self-regulatory
organizations;
(C) identify problems that investors have
with financial service providers and investment
products;
(D) analyze the potential impact on investors
of--
(i) proposed regulations of the
Commission; and
(ii) proposed rules of self-
regulatory organizations registered
under this title; and
(E) to the extent practicable, propose to the
Commission changes in the regulations or orders
of the Commission and to Congress any
legislative, administrative, or personnel
changes that may be appropriate to mitigate
problems identified under this paragraph and to
promote the interests of investors.
(5) Access to documents.--The Commission shall ensure
that the Investor Advocate has full access to the
documents of the Commission and any self-regulatory
organization, as necessary to carry out the functions
of the Office.
(6) Annual reports.--
(A) Report on objectives.--
(i) In general.--Not later than June
30 of each year after 2010, the
Investor Advocate shall submit to the
Committee on Banking, Housing, and
Urban Affairs of the Senate and the
Committee on Financial Services of the
House of Representatives a report on
the objectives of the Investor Advocate
for the following fiscal year.
(ii) Contents.--Each report required
under clause (i) shall contain full and
substantive analysis and explanation.
(B) Report on activities.--
(i) In general.--Not later than
December 31 of each year after 2010,
the Investor Advocate shall submit to
the Committee on Banking, Housing, and
Urban Affairs of the Senate and the
Committee on Financial Services of the
House of Representatives a report on
the activities of the Investor Advocate
during the immediately preceding fiscal
year.
(ii) Contents.--Each report required
under clause (i) shall include--
(I) appropriate statistical
information and full and
substantive analysis;
(II) information on steps
that the Investor Advocate has
taken during the reporting
period to improve investor
services and the responsiveness
of the Commission and self-
regulatory organizations to
investor concerns;
(III) a summary of the most
serious problems encountered by
investors during the reporting
period;
(IV) an inventory of the
items described in subclause
(III) that includes--
(aa) identification
of any action taken by
the Commission or the
self-regulatory
organization and the
result of such action;
(bb) the length of
time that each item has
remained on such
inventory; and
(cc) for items on
which no action has
been taken, the reasons
for inaction, and an
identification of any
official who is
responsible for such
action;
(V) recommendations for such
administrative and legislative
actions as may be appropriate
to resolve problems encountered
by investors; and
(VI) any other information,
as determined appropriate by
the Investor Advocate.
(iii) Independence.--Each report
required under this paragraph shall be
provided directly to the Committees
listed in clause (i) without any prior
review or comment from the Commission,
any commissioner, any other officer or
employee of the Commission, or the
Office of Management and Budget.
(iv) Confidentiality.--No report
required under clause (i) may contain
confidential information.
(7) Regulations.--The Commission shall, by
regulation, establish procedures requiring a formal
response to all recommendations submitted to the
Commission by the Investor Advocate, not later than 3
months after the date of such submission.
(8) Ombudsman.--
(A) Appointment.--Not later than 180 days
after the date on which the first Investor
Advocate is appointed under paragraph
(2)(A)(i), the Investor Advocate shall appoint
an Ombudsman, who shall report directly to the
Investor Advocate.
(B) Duties.--The Ombudsman appointed under
subparagraph (A) shall--
(i) act as a liaison between the
Commission and any retail investor in
resolving problems that retail
investors may have with the Commission
or with self-regulatory organizations;
(ii) review and make recommendations
regarding policies and procedures to
encourage persons to present questions
to the Investor Advocate regarding
compliance with the securities laws;
and
(iii) establish safeguards to
maintain the confidentiality of
communications between the persons
described in clause (ii) and the
Ombudsman.
(C) Limitation.--In carrying out the duties
of the Ombudsman under subparagraph (B), the
Ombudsman shall utilize personnel of the
Commission to the extent practicable. Nothing
in this paragraph shall be construed as
replacing, altering, or diminishing the
activities of any ombudsman or similar office
of any other agency.
(D) Report.--The Ombudsman shall submit a
semiannual report to the Investor Advocate that
describes the activities and evaluates the
effectiveness of the Ombudsman during the
preceding year. The Investor Advocate shall
include the reports required under this section
in the reports required to be submitted by the
Inspector Advocate under paragraph (6).
(h) Examiners.--
(1) Division of trading and markets.--The Division of
Trading and Markets of the Commission, or any successor
organizational unit, shall have a staff of examiners
who shall--
(A) perform compliance inspections and
examinations of entities under the jurisdiction
of that Division; and
(B) report to the Director of that Division.
(2) Division of investment management.--The Division
of Investment Management of the Commission, or any
successor organizational unit, shall have a staff of
examiners who shall--
(A) perform compliance inspections and
examinations of entities under the jurisdiction
of that Division; and
(B) report to the Director of that Division.
(i) Securities and Exchange Commission Reserve Fund.--
(1) Reserve fund established.--There is established
in the Treasury of the United States a separate fund,
to be known as the ``Securities and Exchange Commission
Reserve Fund'' (referred to in this subsection as the
``Reserve Fund'').
(2) Reserve fund amounts.--
(A) In general.--Except as provided in
subparagraph (B), any registration fees
collected by the Commission under section 6(b)
of the Securities Act of 1933 (15 U.S.C.
77f(b)) or section 24(f) of the Investment
Company Act of 1940 (15 U.S.C. 80a-24(f)) shall
be deposited into the Reserve Fund.
(B) Limitations.--For any 1 fiscal year--
(i) the amount deposited in the Fund
may not exceed $50,000,000; and
(ii) the balance in the Fund may not
exceed $100,000,000.
(C) Excess fees.--Any amounts in excess of
the limitations described in subparagraph (B)
that the Commission collects from registration
fees under section 6(b) of the Securities Act
of 1933 (15 U.S.C. 77f(b)) or section 24(f) of
the Investment Company Act of 1940 (15 U.S.C.
80a-24(f)) shall be deposited in the General
Fund of the Treasury of the United States and
shall not be available for obligation by the
Commission.
(3) Use of amounts in reserve fund.--The Commission
may obligate amounts in the Reserve Fund, not to exceed
a total of $100,000,000 in any 1 fiscal year, as the
Commission determines is necessary to carry out the
functions of the Commission. Any amounts in the reserve
fund shall remain available until expended. Not later
than 10 days after the date on which the Commission
obligates amounts under this paragraph, the Commission
shall notify Congress of the date, amount, and purpose
of the obligation.
(4) Rule of construction.--Amounts collected and
deposited in the Reserve Fund shall not be construed to
be Government funds or appropriated monies and shall
not be subject to apportionment for the purpose of
chapter 15 of title 31, United States Code, or under
any other authority.
(j) Office of the Advocate for Small Business Capital
Formation.--
(1) Office established.--There is established within
the Commission the Office of the Advocate for Small
Business Capital Formation (hereafter in this
subsection referred to as the ``Office'').
(2) Advocate for small business capital formation.--
(A) In general.--The head of the Office shall
be the Advocate for Small Business Capital
Formation, who shall--
(i) report directly to the
Commission; and
(ii) be appointed by the Commission,
from among individuals having
experience in advocating for the
interests of small businesses and
encouraging small business capital
formation.
(B) Compensation.--The annual rate of pay for
the Advocate for Small Business Capital
Formation shall be equal to the highest rate of
annual pay for other senior executives who
report directly to the Commission.
(C) No current employee of the commission.--
An individual may not be appointed as the
Advocate for Small Business Capital Formation
if the individual is currently employed by the
Commission.
(3) Staff of office.--The Advocate for Small Business
Capital Formation, after consultation with the
Commission, may retain or employ independent counsel,
research staff, and service staff, as the Advocate for
Small Business Capital Formation determines to be
necessary to carry out the functions of the Office.
(4) Functions of the advocate for small business
capital formation.--The Advocate for Small Business
Capital Formation shall--
(A) assist small businesses and small
business investors in resolving significant
problems such businesses and investors may have
with the Commission or with self-regulatory
organizations;
(B) identify areas in which small businesses
and small business investors would benefit from
changes in the regulations of the Commission or
the rules of self-regulatory organizations;
(C) identify problems that small businesses
have with securing access to capital, including
any unique challenges to minority-owned and
women-owned small businesses;
(D) analyze the potential impact on small
businesses and small business investors of--
(i) proposed regulations of the
Commission that are likely to have a
significant economic impact on small
businesses and small business capital
formation; and
(ii) proposed rules that are likely
to have a significant economic impact
on small businesses and small business
capital formation of self-regulatory
organizations registered under this
title;
(E) conduct outreach to small businesses and
small business investors, including through
regional roundtables, in order to solicit views
on relevant capital formation issues;
(F) to the extent practicable, propose to the
Commission changes in the regulations or orders
of the Commission and to Congress any
legislative, administrative, or personnel
changes that may be appropriate to mitigate
problems identified under this paragraph and to
promote the interests of small businesses and
small business investors;
(G) consult with the Investor Advocate on
proposed recommendations made under
subparagraph (F); and
(H) advise the Investor Advocate on issues
related to small businesses and small business
investors.
(5) Access to documents.--The Commission shall ensure
that the Advocate for Small Business Capital Formation
has full access to the documents and information of the
Commission and any self-regulatory organization, as
necessary to carry out the functions of the Office.
(6) Annual report on activities.--
(A) In general.--Not later than December 31
of each year after 2015, the Advocate for Small
Business Capital Formation shall submit to the
Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on
Financial Services of the House of
Representatives a report on the activities of
the Advocate for Small Business Capital
Formation during the immediately preceding
fiscal year.
(B) Contents.--Each report required under
subparagraph (A) shall include--
(i) appropriate statistical
information and full and substantive
analysis;
(ii) information on steps that the
Advocate for Small Business Capital
Formation has taken during the
reporting period to improve small
business services and the
responsiveness of the Commission and
self-regulatory organizations to small
business and small business investor
concerns;
(iii) a summary of the most serious
issues encountered by small businesses
and small business investors, including
any unique issues encountered by
minority-owned and women-owned small
businesses and their investors, during
the reporting period;
(iv) an inventory of the items
summarized under clause (iii)
(including items summarized under such
clause for any prior reporting period
on which no action has been taken or
that have not been resolved to the
satisfaction of the Advocate for Small
Business Capital Formation as of the
beginning of the reporting period
covered by the report) that includes--
(I) identification of any
action taken by the Commission
or the self-regulatory
organization and the result of
such action;
(II) the length of time that
each item has remained on such
inventory; and
(III) for items on which no
action has been taken, the
reasons for inaction, and an
identification of any official
who is responsible for such
action;
(v) recommendations for such changes
to the regulations, guidance and orders
of the Commission and such legislative
actions as may be appropriate to
resolve problems with the Commission
and self-regulatory organizations
encountered by small businesses and
small business investors and to
encourage small business capital
formation; and
(vi) any other information, as
determined appropriate by the Advocate
for Small Business Capital Formation.
(C) Confidentiality.--No report required by
subparagraph (A) may contain confidential
information.
(D) Independence.--Each report required under
subparagraph (A) shall be provided directly to
the committees of Congress listed in such
subparagraph without any prior review or
comment from the Commission, any commissioner,
any other officer or employee of the
Commission, or the Office of Management and
Budget.
(7) Regulations.--The Commission shall establish
procedures requiring a formal response to all
recommendations submitted to the Commission by the
Advocate for Small Business Capital Formation, not
later than 3 months after the date of such submission.
(8) Government-business forum on small business
capital formation.--The Advocate for Small Business
Capital Formation shall be responsible for planning,
organizing, and executing the annual Government-
Business Forum on Small Business Capital Formation
described in section 503 of the Small Business
Investment Incentive Act of 1980 (15 U.S.C. 80c-1).
(9) Rule of construction.--Nothing in this subsection
may be construed as replacing or reducing the
responsibilities of the Investor Advocate with respect
to small business investors.
* * * * * * *
SEC. 40. SMALL BUSINESS CAPITAL FORMATION ADVISORY COMMITTEE.
(a) Establishment and Purpose.--
(1) Establishment.--There is established within the
Commission the Small Business Capital Formation
Advisory Committee (hereafter in this section referred
to as the ``Committee'').
(2) Functions.--
(A) In general.--The Committee shall provide
the Commission with advice on the Commission's
rules, regulations, and policies with regard to
the Commission's mission of protecting
investors, maintaining fair, orderly, and
efficient markets, and facilitating capital
formation, as such rules, regulations, and
policies relate to--
(i) capital raising by emerging,
privately held small businesses
(``emerging companies'') and publicly
traded companies with less than
$250,000,000 in public market
capitalization (``smaller public
companies'') through securities
offerings, including private and
limited offerings and initial and other
public offerings;
(ii) trading in the securities of
emerging companies and smaller public
companies; and
(iii) public reporting and corporate
governance requirements of emerging
companies and smaller public companies.
(B) Limitation.--The Committee shall not
provide any advice with respect to any
policies, practices, actions, or decisions
concerning the Commission's enforcement
program.
(b) Membership.--
(1) In general.--The members of the Committee shall
be--
(A) the Advocate for Small Business Capital
Formation;
(B) not fewer than 10, and not more than 20,
members appointed by the Commission, from among
individuals--
(i) who represent--
(I) emerging companies
engaging in private and limited
securities offerings or
considering initial public
offerings (``IPO'') (including
the companies' officers and
directors);
(II) the professional
advisors of such companies
(including attorneys,
accountants, investment
bankers, and financial
advisors); and
(III) the investors in such
companies (including angel
investors, venture capital
funds, and family offices);
(ii) who are officers or directors of
minority-owned small businesses and
women-owned small businesses;
(iii) who represent--
(I) smaller public companies
(including the companies'
officers and directors);
(II) the professional
advisors of such companies
(including attorneys, auditors,
underwriters, and financial
advisors); and
(III) the pre-IPO and post-
IPO investors in such companies
(both institutional, such as
venture capital funds, and
individual, such as angel
investors); and
(iv) who represent participants in
the marketplace for the securities of
emerging companies and smaller public
companies, such as securities
exchanges, alternative trading systems,
analysts, information processors, and
transfer agents; and
(C) 3 non-voting members--
(i) 1 of whom shall be appointed by
the Investor Advocate;
(ii) 1 of whom shall be appointed by
the North American Securities
Administrators Association; and
(iii) 1 of whom shall be appointed by
the Administrator of the Small Business
Administration.
(2) Term.--Each member of the Committee appointed
under subparagraph (B), (C)(ii), or (C)(iii) of
paragraph (1) shall serve for a term of 4 years.
(3) Members not commission employees.--Members
appointed under subparagraph (B), (C)(ii), or (C)(iii)
of paragraph (1) shall not be treated as employees or
agents of the Commission solely because of membership
on the Committee.
(c) Chairman; Vice Chairman; Secretary; Assistant
Secretary.--
(1) In general.--The members of the Committee shall
elect, from among the members of the Committee--
(A) a chairman;
(B) a vice chairman;
(C) a secretary; and
(D) an assistant secretary.
(2) Term.--Each member elected under paragraph (1)
shall serve for a term of 3 years in the capacity for
which the member was elected under paragraph (1).
(d) Meetings.--
(1) Frequency of meetings.--The Committee shall
meet--
(A) not less frequently than four times
annually, at the call of the chairman of the
Committee; and
(B) from time to time, at the call of the
Commission.
(2) Notice.--The chairman of the Committee shall give
the members of the Committee written notice of each
meeting, not later than 2 weeks before the date of the
meeting.
(e) Compensation and Travel Expenses.--Each member of the
Committee who is not a full-time employee of the United States
shall--
(1) be entitled to receive compensation at a rate not
to exceed the daily equivalent of the annual rate of
basic pay in effect for a position at level V of the
Executive Schedule under section 5316 of title 5,
United States Code, for each day during which the
member is engaged in the actual performance of the
duties of the Committee; and
(2) while away from the home or regular place of
business of the member in the performance of services
for the Committee, be allowed travel expenses,
including per diem in lieu of subsistence, in the same
manner as persons employed intermittently in the
Government service are allowed expenses under section
5703 of title 5, United States Code.
(f) Staff.--The Commission shall make available to the
Committee such staff as the chairman of the Committee
determines are necessary to carry out this section.
(g) Review by Commission.--The Commission shall--
(1) review the findings and recommendations of the
Committee; and
(2) each time the Committee submits a finding or
recommendation to the Commission, promptly issue a
public statement--
(A) assessing the finding or recommendation
of the Committee; and
(B) disclosing the action, if any, the
Commission intends to take with respect to the
finding or recommendation.
(h) Federal Advisory Committee Act.--The Federal Advisory
Committee Act (5 U.S.C. App.) shall not apply with respect to
the Committee and its activities.
* * * * * * *
----------
SECTION 503 OF THE SMALL BUSINESS INVESTMENT INCENTIVE ACT OF 1980
ANNUAL GOVERNMENT-BUSINESS FORUM ON CAPITAL FORMATION
Sec. 503. (a) Pursuant to the consultation called for in
section 502, the Securities and Exchange Commission (acting
through the Office of the Advocate for Small Business Capital
Formation and in consultation with the Small Business Capital
Formation Advisory Committee) shall conduct an annual
Government-business forum to review the current status of
problems and programs relating to small business capital
formation.
(b) The Commission shall invite other Federal agencies, such
as the Department of the Treasury, the Board of Governors of
the Federal Reserve System, the Small Business Administration,
organizations representing State securities commissioners, and
leading small business and professional organizations concerned
with capital formation, to participate in the planning for such
forums.
(c) The Commission may request any of the Federal
departments, agencies, or organizations such as those specified
in subsection (b), or other groups or individuals, to prepare
statements and reports to be delivered at such forums. Such
departments and agencies shall cooperate in this effort.
(d) A summary of the proceedings of such forums and any
findings or recommendations thereof shall be prepared and
transmitted to the participants, appropriate committees of the
Congress, and others who may be interested in the subject
matter.
