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House Panel Passes Bill to Help Ease SEC Rules on Small Firms

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The House Financial Services Committee passed on Wednesday two bills that require the Securities and Exchange Commission to revise the definitions of a ‘‘small business’’ and ‘‘small organization’’ under the Investment Advisers Act and require the agency to set up a senior investor task force.

Both bills, H.R. 6321, the Investment Adviser Regulatory Flexibility Improvement Act, and H.R. 6323, the National Senior Investor Initiative Act of 2018, were reported to the full House.

Rep. Maxine Waters, D-Calif., quoted from a letter at the Wednesday markup that was submitted to her by the Investment Adviser Association, which explained that under H.R. 6321, “[T]he SEC would have to better assess the impact of its regulations on firms that are truly small businesses and give greater consideration to appropriate alternatives that would minimize unnecessary burdens on these firms.”

Neil Simon, IAA’s vice president of government relations, told ThinkAdvisor after the bill passed the House panel that “the committee’s action today evidences a new appreciation for the important role that investment advisors play in the financial services marketplace, as well as the success of advisors’ efforts to make their voice heard on Capitol Hill.”

Under the National Senior Investor Initiative Act of 2018, the SEC would be charged with setting up a task force to identify problems that senior investors have with financial services providers and investment products; identify areas in which senior investors would benefit from changes in SEC rules or other regulations; and consult, as appropriate, with state securities and law enforcement authorities.

The full House also passed by voice vote on Tuesday a package of eight bills, including H.R. 5970, the Modernizing Disclosures for Investors Act.

The bill, sponsored by Rep. Ann Wagner, R-Mo., would require the SEC to conduct a study of the costs and benefits of the current Form 10-Q reporting requirement, including with respect to the benefits of standardized quarterly reporting to the SEC, public companies, investors, market researchers, and other market participants.

It also ensures that the SEC studies the potential costs to these entities of alternative formats of quarterly reporting, and the potential impact such alternatives may have on market transparency and efficiency, and directs the securities regulator to issue a report of its analysis and recommendations for decreasing costs, increasing transparency and increasing efficiency of quarterly reporting.

— Check out Trump Creates Task Force to Police Elder, Cyber Frauds on ThinkAdvisor.


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