WASHINGTON, D.C. – H.R. 4164, the Small Company Disclosure Simplification Act, passed the Financial Services Committee today by a 51-5 vote. This bipartisan bill, introduced on March 6th by Congressman Robert Hurt (R-Virginia) and Congresswoman Terri Sewell (D-Alabama), would streamline regulations for small public companies, removing a disincentive for them to access capital in the public markets. Hurt released the following statement after Committee passage:
"With millions of Americans still out of work, our top focus in Congress should be enacting polices to help spur job creation throughout the country. We must refine costly regulations – especially those disproportionately affecting smaller public companies and those who are considering accessing capital in the public markets. The requirement of eXtensible Business Reporting Language (XBRL) has proven to be an example of a regulation where the costs currently outweigh potential benefits for small, innovative companies.
"The Small Company Disclosure Simplification Act provides a much-needed exemption from these burdensome regulations for smaller public companies and requires the SEC to perform a cost benefit analysis on the rule's impact on these companies. Our bill offers a practical step forward to ensure that our regulatory structure is not disproportionately burdening smaller companies and dis-incentivizing innovative start-ups from accessing the public markets. Instead, these companies can focus on utilizing capital for innovative research, expansion, and job creation.
"I was pleased to see this important legislation pass the Financial Services Committee today with a strong bipartisan vote and I look forward to continuing to work with my fellow Committee members to enact pro-growth policies that allow our nation's smaller companies to access capital and continue to be the engines of job growth."
- In order to comply with this XBRL regulation, small companies must expend tens of thousands of dollars on average; however, evidence suggests that less than ten percent of investors actually use XBRL.
- In line with the JOBS Act, the Small Company Disclosure Simplification Act removes duplicative regulations for small companies from submitting interactive data filings with XBRL. Public companies are still required to file mandatory information with the Securities and Exchange Commission (SEC).
- This bill allows companies to focus on innovating, expanding, and creating jobs, rather than complying with duplicative and unnecessary federal regulations.