June 8, 2022
Time for More JOBS Act?
Over the past two months, some Senate Republicans have been circulating a discussion draft of the JOBS Act 4.0, which collects several legislative proposals geared toward facilitating capital formation. The discussion draft follows a request made in February 2021 by U.S. Senate Banking Committee Ranking Member Pat Toomey (R-PA) for legislative proposals to increase economic growth and job creation by facilitating capital formation. That request gathered 35 submissions with more than 150 legislative proposals from a wide variety of bipartisan organizations and stakeholders. The comment period on the discussion draft of JOBS Act 4.0 ended last Friday.
Title I of the draft legislation includes provisions that would encourage companies to be public, including modifying the emerging growth company definition to extend the benefits afforded to EGCs, repealing the conflict minerals, mine safety, resource extraction, and pay ratio disclosure requirements from the Dodd-Frank Act, permitting companies to choose semiannual rather than quarterly reporting, regulating advice from proxy advisory firms, adjusting the Rule 14a-8 submission thresholds and encouraging the creation of venture exchanges. Title II includes various legislative initiatives to improve the market for private capital, Title III addresses retail investor access to investment opportunities and Title IV includes provisions for improving regulatory oversight by the SEC.
It is hard to say whether this legislation will advance in Congress in some form, particularly given that many of the contemplated provisions are not likely to gain much support from Democrats. Even if the legislation does not make it far, it is at least encouraging to see that capital formation and the burdens on public companies are still topics that are being considered in Congress.
– Dave Lynn