House leaders strike bipartisan deal to boost business investment

The leaders of the House Financial Services Committee on Monday unveiled the details of a legislative package meant to boost investment in budding U.S. businesses.

Reps. Jeb Hensarling (R-Texas) and Maxine Waters (D-Calif.), the chairman and ranking member, respectively, said Monday that they had agreed to combine 32 bills previously passed by their committee into a single measure. The package is intended to give small businesses and startups a cheaper and easier pathway to going public and fuel growth.

Each bill in the agreement dubbed the JOBS and Investor Confidence Act passed the House or Financial Services panel with almost no resistance. The House is scheduled to vote on the package Tuesday and will likely pass the measure with little opposition.

Senate leaders have pledged to hold a vote on the package, according to Hensarling, but it’s unclear if and when that will happen. The bill would also need the support of at least 10 Senate Democrats to pass if all GOP senators support it, which could potentially sink the package

The deal is the result of months of negotiations between Hensarling, the committee’s chairman, and Waters, the panel’s ranking Democrat. The committee has cranked out several dozen bills over the past 18 months meant to help small businesses and startups go public and lure the investment they need to expand.

Hensarling said the package is “designed to breathe new life into markets that are suffocating under aging regulations” and “will play an important role in sustaining long-term economic growth and global competitiveness.”

Waters praised her colleagues for “working together to live up to what we always say—that we all support small businesses, their access to capital and protecting investors.”

“This is true bipartisanship we are witnessing today,” Waters said.

Hensarling, who will retire after this year, has sought to pass a slew of measures meant to encourage a steady stream of U.S. initial public offerings. The number of companies that made their first stock offerings fell each year from 2014 through 2016 before increasing last year, according to data compiled by Bloomberg.

Democrats have also expressed concerns about the growing power and market share of large U.S. corporations, which they fear will suppress or overtake burgeoning businesses.

The deal includes provisions meant to give investors and businesses legal clarity about the types of interactions, meetings, and proposals allowed under securities law. It also seeks to give companies considering a public offering more time and freedom to gauge investor interest.

One provision would create a new exchange for shares in small businesses and startups that are currently ineligible for public trading. Venture investors would only be able to trade shares of companies on the exchange during periodic auctions, and shares of listed firms would not be legally tradable anywhere else.

Other provisions would update, clarify, or raise several disclosure thresholds and qualifications in ways meant to expand the scope of businesses and investors that can hold or participate in certain stock offerings.

The deal also includes measures to mandate studies of current securities laws, and establish new procedures to crack down on insider trading, financial fraud against senior citizens, money laundering, and human trafficking.