A bill introduced in the lower chamber of Congress to exempt private equity firms from registering with the US Securities and Exchange Commission has passed the Financial Services Committee with bipartisan support. The bill now makes its way for a vote on the Republican-led House floor.
The bill cleared its latest legislative hurdle just as the SEC announced it was pushing back the registration deadline from 21 July to 30 March 2012.
The “Small Business Capital Access and Job Preservation Act” was approved by a Financial Services subcommittee last month. If passed by the House, the bill would then move on to approval by the Senate, where Democrats retain a slim majority. President Obama ultimately would hold veto power over any potential legislation, which if used, means the bill would need a two-thirds majority in Congress to pass.
Under Dodd-Frank, the landmark financial reform bill passed last summer, private investment firms with $150 million or more in assets will need to register with the SEC – an action resulting in greater reporting requirements and compliance measures.
“This bipartisan bill will help restore confidence and certainty to the marketplace by reducing unnecessary government mandates so that our small businesses can access capital more easily and more jobs can be created and preserved”, said Republican congressman Robert Hurt, the bill’s sponsor, in a statement.
For a definitive guide to SEC registration, see our US Private Equity Fund Compliance Guide.
Republicans challenge SEC guidelines
Just as the SEC publishes guidelines over registration requirements for buyout groups, a Republican-led effort to exempt private equity firms from SEC oversight has taken another step forward.
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