H.R. 4852: The Private Placement Improvement Act of 2016

By at 12 April, 2016, 8:48 pm

The Honorable Scott Garrett

U.S. House of Representatives

Washington, DC 20515


Dear Representative Garrett:

On behalf of the 100,000 members of the Small Business & Entrepreneurship Council, I am pleased to announce our support for H.R. 4852, the Private Placement Improvement Act of 2016. H.R. 4852 would amend federal securities laws to ensure that small businesses do not face complicated and unnecessary regulatory burdens when attempting to raise capital through private securities offerings issued under Regulation D.

The Regulation D capital market is a critical one for the U.S. economy. In 2012, Regulation D offerings ($903 billion) accounted for over half of all private offerings. It is the primary means by which startups and growth companies raise equity capital. In making positive changes to lift the outdated ban on general solicitation, as required by the JOBS Act, the Securities and Exchange Commission (SEC) proposed a separate rule that would impose a number of new regulatory requirements on small companies seeking to utilize amended Rule 506. This includes proposals to submit additional Form D filings to the SEC in advance and at the conclusion of an offering, and to file written general solicitation materials with the SEC. In essence, one regulatory filing would be replaced with three, along with the submission of any written general solicitation materials. This means higher costs for small businesses. The purpose and intent of the JOBS was to improve capital access and reduce compliance burdens for entrepreneurs. This uncalled for rule runs counter to that purpose. H.R. 4852 would not allow these added regulatory burdens to move forward.

SBE Council is pleased the House Committee on Financial Services has acted upon many bipartisan bills that reduce the regulatory burden, streamline compliance and improve capital formation for small businesses. H.R. 4852 is another important piece of legislation for startups and entrepreneurs, and SBE Council looks forward to working with you to advance H.R. 4852 into law.


Karen Kerrigan, President & CEO

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