H.R. 4130: Small Business Relief Act

This bill, named the Small Business Relief Act, seeks to amend the Securities Exchange Act of 1934, specifically regarding the rules for mandatory registration of certain securities. The key changes proposed by the bill are as follows:

Exclusions from Mandatory Registration Threshold

The bill proposes to exclude two specific categories of investors—qualified institutional buyers and institutional accredited investors—from the calculation of the number of holders of a security when determining whether a company is required to register its securities. This means that if a company has a certain number of investors, typically triggering mandatory registration, the presence of these two types of investors would not count towards that total.

Impact on Registration Requirements

By modifying these registration requirements, the bill aims to make it easier for smaller businesses to raise capital without facing the complexities and costs associated with mandatory registration. The intention is to encourage investment in small businesses by reducing regulatory barriers.

General Exemptive Authority Nonapplicability

Furthermore, the bill specifies that the general rules that provide exemptions from registration will not apply to these new amendments. This section ensures that the adjustments made by the bill are distinct and not subject to previously existing exemption rules.

Overall Goal

The overall goal of the Small Business Relief Act is to support small businesses by simplifying the rules surrounding securities and fundraising, thereby potentially leading to increased investment opportunities for these entities.

Relevant Companies

None found