On February 3, 2016, the House passed H.R. 1675, the Encouraging Employee Ownership Act of 2015. The bill directs the SEC to revise regulations to require an issuer to furnish investors with additional specified disclosures regarding compensatory benefit plans if the aggregate sales price or amount of securities sold during any consecutive 12-month period exceeds $10 million (currently $5 million), indexed for inflation every five years. The bill has received strong opposition from the Executive Branch, claiming, in an official statement, that the bill would pose risks to investors, is overly broad, would allow financial institutions to avoid appropriate oversight, in addition to calling it duplicative of existing administrative authorities.
Earlier this week, the House passed H.R. 3784, the SEC Small Business Advocate Act, and H.R. 2187, the Fair Investment Opportunities for Professional Experts Act. As of February 2, 2016, the two bills were received in the Senate and referred to the Committee on Banking, Housing, and Urban Affairs.
For the status of these and other bills relating to capital formation, click here.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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