Congress, SEC Advance Initiatives for Smaller Public Companies

March 15, 2018

Small public companies may soon find life easier when it comes to filing forms and accessing capital, thanks to pending initiatives in Congress and at the SEC.

With more than 9,000 bills and resolutions proposed so far by the 115th Congress in its first 15 months, it might have been easy to overlook H.R. 5054, the “Small Company Disclosure Simplification Act of 2018,” introduced on February 15. The bill would exempt smaller public companies from requirements to use Extensible Business Reporting Language (XBRL) for SEC filings. One of nearly 250 pieces of proposed legislation related to small business in the current Congress, the exemption would apply to public companies with total annual gross revenues of less than $250,000,000.

Meanwhile, at the SEC, which maintains an Office of Small Business Policy, newly-installed Commissioner Hester Peirce, a Republican, has spoken out on the subject of facilitating small business capital formation. She told attendees at a recent SEC Speaks meeting of the Practicing Law Institute on February 23 that she favors a revised regulatory regime for professionals such as attorneys who function as brokers and finders for small companies. A CFA Institute blog quotes her as saying that the “goal would be to set up a regime so that these people who are engaged in this on the side don’t have to register as full broker-dealers.”

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