How Congress Can Grow Investment Opportunities in America

With Congress split, many predict only more stalemate over the next two years. The Chamber of Commerce believes there are many opportunities to advance laws that are favorable to business. One reason is that it has happened before with a split government. In 2012, a split parliament came together to enact the Jumpstart Our Business Startups (JOBS) Act. This is a landmark piece of legislation that will help reduce bureaucratic barriers to capital raising and foster business growth and innovation at an economic scale. The 118th Congress has the opportunity to build on that success.

Understanding the US Regulatory System

Listed and privately held companies have different regulatory standards with respect to financing their growth needs. Generally speaking, listed companies are subject to higher regulatory standards but have access to a larger potential investor base. While there are relatively few regulations on private companies, they face various rules on how they raise capital, including bans on who they can solicit investment from.

Our laws and regulations ensure that both public and private company models are the preferred options for companies to raise capital and provide a fair chance for everyday Americans to share in their growth. It must be guaranteed that

Understanding the JOBS Act

The JOBS Act, signed by President Obama, made it easier for companies to raise money in the private market and become public companies. Private companies now have access to funding through new crowdfunding rules and expanded private securities offerings.

The results were astonishing. In the five years prior to the enactment of the JOBS Act, approximately 121 initial public offerings (IPOs) took place annually in the United States. From 2013 to 2021, after the enactment of the JOBS Act, the annual average of IPOs was 344 per year. However, there is still room for improvement. The 118th Congress must take new action to build on this proven, bipartisan approach to improving capital formation through the creation of new investment opportunities.

There is a strong bipartisan consensus in Congress on the importance of maintaining strong US capital markets. In the 117th Congress, members on both sides of the aisle passed several common-sense bills to expand equitable access to private capital, encourage companies to go public, and enhance investment opportunities for individual investors. submitted.

Business access to capital matters, even if you’re not a business

Improving access to capital for businesses provides new opportunities for financial gains for everyday investors, expands employment opportunities, and creates economic investment in underserved communities. Capitalism works best when there is equal opportunity to share its rewards.

Increasing the number of publicly traded companies will benefit millions of American households who rely on investments to meet their financial goals such as retirement savings and children’s education. When options in these markets are limited and companies are discouraged from going public due to regulatory costs, not only do investors suffer, but the economy as a whole deprives companies of the new economic activity they generate. will be split.

good starting point

The US Chamber of Commerce was a leader in advocating passage of the 2012 JOBS Act and continues to build consensus in Congress on the new legislation. Last year, we informed the Senate Banking Committee on legislative proposals to promote economic growth and job creation through capital formation. We also released a report identifying policy proposals that we believe would be particularly beneficial in expanding access to capital for minority-owned businesses.

This month, we testify before the Senate Banking Committee on “Examining How Capital Markets Help Diverse Entrepreneurs and Investors,” Highlighting Numerous Legislative Proposals to Strengthen Capital Formation Did.

• Startup Continued Growth Act – Emerging growth companies can continue to operate under certain JOBS Act exemptions for an additional five years until they are ready to IPO.

• Crowdfunding Amendment Act – Permits the use of crowdfunding vehicles and exempts crowdfunding offerings from certain SEC registration requirements.

• Crowdfunding Opportunity Improvement Act – Preempts state regulation of secondary transactions, including crowdfunding vehicles, and clarifies legal responsibilities for crowdfunding portals.

• Public Company Registration Threshold Act – can increase the number of non-accredited shareholders a company can have before being required to register with the SEC.

The U.S. Chamber of Commerce will continue to engage with the 118th Congress to advance these and other bipartisan proposals to expand investment opportunities and equitable access to U.S. capital markets. Doing so will help ensure that America remains the premier place to invest and pursue new business ideas.