Robert Hurt introduces bill to reduce the regulatory burden on small companies
Congressman Robert Hurt (R-Virginia) recently introduced the Small Company Disclosure Simplification Act, H.R. 1965. This legislation would streamline regulations for small public companies, removing disincentives for companies to access capital in the public markets. The Small Company Disclosure Simplification Act was examined at today’s Capital Markets and Government Sponsored Enterprises Subcommittee hearing entitled, “Legislative Proposals to Enhance Capital Formation and Reduce Regulatory Burdens.” Hurt released the following statement after the hearing:
“Overregulation of small businesses undoubtedly stands in the way of job creation across Virginia and across our great nation. The costs associated with our current regulatory climate have a negative effect on small companies – our most dynamic job creators. At a time when millions of Americans are out of work, we must be laser-focused on enacting policies that will spur job creation. The Small Company Disclosure Simplification Act, and the other bills we discussed today, are vital steps in ensuring that federal regulations do not stifle growth. These bills allow small companies to innovate and expand, all in the name of creating the jobs that Virginia’s Fifth District so desperately needs.
“The Small Company Disclosure Simplification Act is a commonsense solution that will ease the regulatory burden for smaller public companies and require the Securities and Exchange Commission (SEC) to perform a cost-benefit analysis on the regulations’ impact on these companies. It offers a practical step forward to ensure that our regulatory structure does not disproportionately burden smaller companies and dis-incentivize start-ups from accessing the public markets. By streamlining these requirements, small companies will now be able focus on innovating, expanding, and creating jobs. I look forward to working with my colleagues on the Financial Services Committee to pass this bill, and the others we heard about today. We remain committed to removing unnecessary, bureaucratic red tape and allow small businesses to prosper and strengthen our economy.”
Jeffrey M. Gallagher, CEO of Virginia Bio, said, “I want to thank Representative Hurt for introducing this important legislation. There are hundreds of biotech companies in Virginia, and these emerging innovators are uniquely impacted by costly roadblocks like XBRL. Unnecessary bureaucratic red tape can divert capital from the lab and delay or derail promising research. Small companies across our state need commonsense regulations that do not impede their growth. Representative Hurt’s Small Company Disclosure Simplification Act is an important step that will support economic growth and accelerate research and the development of life-saving products and treatments in the Commonwealth.”
· In order to comply with eXtensible Business Reporting Language (XBRL) regulation, small public companies must expend tens of thousands of dollars on average; however, evidence suggests that less than ten percent of investors actually use XBRL.
· The Small Company Disclosure Simplification Act eases the regulatory burden for smaller public companies from submitting interactive data filings with XBRL. Public companies are still required to file mandatory information with the SEC.
· The bill requires the SEC to revise its cost-benefit analysis to ensure a better understanding of the disproportionate costs this regulation is having on small companies.
· This legislation allows small companies to focus on innovating, expanding, and creating jobs, rather than complying with unnecessary federal regulations.