Congressman Patrick McHenry, the Chairman of the House Financial Services Committee, discussed the benefits of the Expanding Access to Capital Act (HR 2799). Speaking before the House Committee on Rules, McHenry said HR 2799 builds upon the success of the JOBS Act of 2012 – the legislation that legalized securities crowdfunding.
In prepared remarks, McHenry said the Act will “facilitate capital formation by strengthening our public markets, helping small businesses and entrepreneurs, and creating new opportunities for all investors.”
Noting that the JOBS Act was successful, benefitting the overall economy, McHenry said there are some commonsense steps Congress to take to boost economic growth.
McHenry stated:
“This bill is designed to address three key facets of our capital markets. It will strengthen our public markets, help small businesses and entrepreneurs, and create new opportunities for everyday investors to build wealth through our private markets. First, our public markets. This bill aims to reverse the dangerous decline in initial public offerings, or IPOs, in the United States.”
McHenry said that some want to fix the broken IPO market by making it more difficult to be private – an obviously misdirected policy.
He also said that HR 2799 will “democratize fundraising for small businesses and entrepreneurs across the country” with venture funds abile to raise more money from more investors.
McHenry addressed the discriminatory nature of the current definition of an Accredited Investor. He explained that HR 2799 reforms the current, antiquated approach so wealth is no longer the primary measure of sophistication.
“U.S. capital markets are too important to neglect, and we must prioritize needed improvements for the benefit of both American entrepreneurship and everyday American investors. I am proud of the bipartisan work Congress did a little over 10 years ago to pass the JOBS Act and strengthen our capital markets,” McHenry said.
There should be sufficient support to pass the legislation in the House, but the Senate may present a more difficult challenge for the legislation. That being said, it is hard to vote against opportunity and access in a Presidential election year.