A bill to exempt private equity firms from registering with the US Securities and Exchange Commission cleared its first legal hurdle this week.
The “Small Business Capital Access and Job Preservation Act” was approved by a House subcommittee 19 to 13. The bill will be considered by the full Financial Services Committee for a possible house vote.
“This bill reduces unnecessary government mandates to increase small businesses’ access to capital so that more jobs can be created,” said Republican congressman Robert Hurt, the bill’s sponsor, in a statement.
Only one subcommittee member, Jim Himes, a Democrat from Connecticut, broke party ranks to vote for the Republican-backed bill. Himes also withdrew a proposal which would limit the exemption to firms managing less than $10 billion.
If passed by the Republican-controlled 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 the landmark financial reform bill “Dodd-Frank” 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.
For our coverage of the bill’s introduction in March click here.