Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...
March 2 — The House Financial Services Committee approved a lineup of securities bills March 2 dealing with the SEC’s in-house forum, Dodd-Frank risk retention rules, venture exchanges, emerging growth company audit requirements, the Volcker Rule and startup capital.
One bill, H.R. 3798, would allow Securities and Exchange Commission respondents to move many enforcement actions into federal court and would increase the burden of proof for the SEC in cases that stay in-house.
That bill would “protect the vital due process rights of defendants in proceedings before the Securities and Exchange Commission,” Committee Chairman Jeb Hensarling (R-Texas) said.
Another would allow the agency to approve “venture exchanges” for trading with fewer regulations in companies with a market capitalization of less than $1 billion. Both bills were sponsored by Rep. Scott Garrett (R-N.J.).
The in-house court bill sparked debate among committee members, who echoed some of the same arguments raised by administrative respondents challenging the constitutionality and fairness of the forum.
In a March 2 letter to members of Congress, a coalition of public interest groups, including Americans for Financial Reform and Public Citizen, called it “astoundingly hypocritical” to open federal court to accused companies when those companies often contract with their customers to avoid federal courts in case of disputes.
The bill was approved 32-25, along party lines.
The venture exchanges bill, H.R. 4638, was approved 32-25, also along party lines.
The committee also approved legislation to pare back Dodd-Frank Act risk retention rules as they affect commercial real-estate loans and collateralized loan obligations.
The rules, jointly adopted by federal financial regulators in October 2014, require sponsors of securitizations to retain some of the risk in the instruments .
H.R. 4166 was introduced by Rep. Andy Barr (R-Ky.). Under that bill, leverage restrictions would be sharply reduced for CLOs, but some qualified CLOs would be still be subject to credit risk retention rules. It was approved 42-15.
The other bill, introduced by Rep. French Hill (R-Ark.), would exempt commercial real estate loans and some securitizations of those loans from the rules.
That bill, H.R. 4620, would “essentially exempt most securitizations of corporate loans from risk retention,” Committee Ranking Member Maxine Waters (D-Calif.) said. It “would diminish underwriting standards that we sought to promote in the Dodd-Frank Act.” It was approved 39-18 despite some Democratic objection..
One approved bill would allow issuers to present offerings at certain events without running afoul of the prohibition on general solicitation, provided they don’t give specific information about the offerings.
The sponsors of the events would also be prohibited from negotiating the offerings or giving investment advice.
That bill, H.R. 4498, sponsored by Rep. Steve Chabot (R-Ohio), was approved 44-13.
Rep. Kyrsten Sinema (D-Ariz.) sponsored H.R. 4139, which would affect audit rules.
Sarbanes-Oxley Section 404(b) requires public companies’ auditors to attest to management’s analysis of internal controls. The bill would tack on five more years to the existing exemption for emerging growth companies from those requirements.
“It’s a very small number of companies” affected, Sinema said. It was approved 42-15 with Democratic support.
Another bill would largely undo a Volcker Rule prohibition on related investment advisers and private equity funds having the same name.
H.R. 4096 was sponsored by Rep. Michael Capuano (D-Mass.) and was approved by voice vote.
To contact the reporter on this story: Rob Tricchinelli in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Phyllis Diamond at email@example.com
For H.R. 3798, visit http://financialservices.house.gov/uploadedfiles/bills-114hr3798ih.pdf
For H.R. 4096, visit http://financialservices.house.gov/uploadedfiles/bills-114hr3798ih.pdf
For H.R. 4139, visit http://financialservices.house.gov/uploadedfiles/bills-114hr3798ih.pdf
For H.R. 4166, visit http://financialservices.house.gov/uploadedfiles/bills-114hr4166ih.pdf
For H.R. 4498, visit http://financialservices.house.gov/uploadedfiles/bills-114hr4498ih.pdf
For H.R. 4620, visit http://financialservices.house.gov/uploadedfiles/bills-114hr4620pih.pdf
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)