[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2867 Introduced in Senate (IS)]
<DOC>
114th CONGRESS
2d Session
S. 2867
To amend the Securities Exchange Act of 1934 to establish an Office of
the Advocate for Small Business Capital Formation and a Small Business
Capital Formation Advisory Committee, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 27, 2016
Ms. Heitkamp (for herself, Mr. Heller, and Mr. Peters) introduced the
following bill; which was read twice and referred to the Committee on
Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Securities Exchange Act of 1934 to establish an Office of
the Advocate for Small Business Capital Formation and a Small Business
Capital Formation Advisory Committee, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``SEC Small Business Advocate Act of
2016''.
SEC. 2. ESTABLISHMENT OF THE OFFICE OF THE ADVOCATE FOR SMALL BUSINESS
CAPITAL FORMATION AND THE SMALL BUSINESS CAPITAL
FORMATION ADVISORY COMMITTEE.
(a) Office of the Advocate for Small Business Capital Formation.--
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is
amended by adding at the end the following:
``(j) Office of the Advocate for Small Business Capital
Formation.--
``(1) Office established.--There is established within the
Commission the Office of the Advocate for Small Business
Capital Formation (in this subsection referred to as the
`Office').
``(2) Advocate for small business capital formation.--
``(A) In general.--The head of the Office shall be
the Advocate for Small Business Capital Formation, who
shall--
``(i) report directly to the Commission;
and
``(ii) be appointed by the Commission, from
among individuals having experience in--
``(I) advocating for the interests
of small businesses; and
``(II) encouraging small business
capital formation.
``(B) Compensation.--The annual rate of pay for the
Advocate for Small Business Capital Formation shall be
equal to the highest rate of annual pay for other
senior executives who report directly to the
Commission.
``(C) No current employee of the commission.--An
individual may not be appointed as the Advocate for
Small Business Capital Formation if the individual is
employed by the Commission at the time of the
appointment.
``(3) Staff of office.--The Advocate for Small Business
Capital Formation, after consultation with the Commission, may
retain or employ independent counsel, research staff, and
service staff, as the Advocate for Small Business Capital
Formation determines to be necessary to carry out the functions
of the Office.
``(4) Functions of the advocate for small business capital
formation.--The Advocate for Small Business Capital Formation
shall--
``(A) assist small businesses and small business
investors in resolving significant problems that the
businesses and investors may have with the Commission
or with self-regulatory organizations;
``(B) identify areas in which small businesses and
small business investors would benefit from changes in
the regulations of the Commission or the rules of self-
regulatory organizations;
``(C) identify problems that small businesses have
with securing access to capital, including any unique
challenges faced by minority-owned and women-owned
small businesses;
``(D) analyze the potential impacts on small
businesses and small business investors of--
``(i) proposed regulations of the
Commission that are likely to have a
significant economic impact on small businesses
and small business capital formation; and
``(ii) proposed rules that are likely to
have a significant economic impact on small
businesses and small business capital formation
of self-regulatory organizations registered
under this title;
``(E) conduct outreach to small businesses and
small business investors, including through regional
roundtables, in order to solicit views on relevant
capital formation issues;
``(F) to the extent practicable, propose to the
Commission changes in the regulations or orders of the
Commission and to Congress any legislative,
administrative, or personnel changes that may be
appropriate to--
``(i) mitigate problems identified under
this paragraph; and
``(ii) promote the interests of small
businesses and small business investors;
``(G) consult with the Investor Advocate on
proposed recommendations made under subparagraph (F);
and
``(H) advise the Investor Advocate on issues
related to small businesses and small business
investors.
``(5) Access to documents.--The Commission shall ensure
that the Advocate for Small Business Capital Formation has full
access to the documents and information of the Commission and
any self-regulatory organization, as necessary to carry out the
functions of the Office.
``(6) Annual report on activities.--
``(A) In general.--Not later than December 31 of
each year beginning in 2016, the Advocate for Small
Business Capital Formation shall submit to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the
House of Representatives a report on the activities of
the Advocate for Small Business Capital Formation
during the immediately preceding fiscal year.
``(B) Contents.--Each report required under
subparagraph (A) shall include--
``(i) appropriate statistical information
and full and substantive analysis;
``(ii) information on steps that the
Advocate for Small Business Capital Formation
has taken during the reporting period to
improve--
``(I) small business services; and
``(II) the responsiveness of the
Commission and self-regulatory
organizations with respect to small
businesses and small business investor
concerns;
``(iii) a summary of the most serious
issues encountered by small businesses and
small business investors, including any unique
issues encountered by minority-owned and women-
owned small businesses and investors in those
small businesses, during the reporting period;
``(iv) an inventory of the items summarized
under clause (iii), including--
``(I) items summarized under that
clause for any prior reporting period--
``(aa) on which no action
has been taken; or
``(bb) that have not been
resolved to the satisfaction of
the Advocate for Small Business
Capital Formation as of the
beginning of the reporting
period covered by the report;
``(II) identification of any action
taken by the Commission or the self-
regulatory organization and the result
of the action;
``(III) the length of time that
each item has remained on the
inventory; and
``(IV) for items on which no action
has been taken--
``(aa) the reasons for the
inaction; and
``(bb) an identification of
any official who is responsible
for taking action;
``(v) recommendations for legislative
actions and changes to the regulations,
guidance, and orders of the Commission that may
be appropriate to--
``(I) resolve problems with the
Commission and self-regulatory
organizations encountered by small
businesses and small business
investors; and
``(II) encourage small business
capital formation; and
``(vi) any other information, as determined
appropriate by the Advocate for Small Business
Capital Formation.
``(C) Confidentiality.--No report required under
subparagraph (A) may contain confidential information.
``(D) Independence.--Each report required under
subparagraph (A) shall be provided directly to the
committees of Congress listed in that subparagraph
without any prior review or comment from the
Commission, any commissioner, any other officer or
employee of the Commission, or the Office of Management
and Budget.
``(7) Regulations.--The Commission shall establish
procedures requiring a formal response to all recommendations
submitted to the Commission by the Advocate for Small Business
Capital Formation, not later than 3 months after the date of
the submission.
``(8) Government-business forum on small business capital
formation.--The Advocate for Small Business Capital Formation
shall be responsible for planning, organizing, and executing
the annual Government-Business Forum on Small Business Capital
Formation described in section 503 of the Small Business
Investment Incentive Act of 1980 (15 U.S.C. 80c-1).
``(9) Rule of construction.--Nothing in this subsection may
be construed as replacing or reducing the responsibilities of
the Investor Advocate with respect to small business
investors.''.
(b) Small Business Capital Formation Advisory Committee.--Title I
of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is
amended by adding at the end the following:
``SEC. 40. SMALL BUSINESS CAPITAL FORMATION ADVISORY COMMITTEE.
``(a) Definitions.--In this section--
``(1) the term `Committee' means the Small Business Capital
Formation Advisory Committee established under subsection (b);
``(2) the term `emerging companies' means emerging,
privately held small businesses;
``(3) the term `IPO' means initial public offering; and
``(4) the term `smaller public companies' means publicly
traded companies with less than $250,000,000 in public market
capitalization.
``(b) Establishment and Purpose.--
``(1) Establishment.--There is established within the
Commission the Small Business Capital Formation Advisory
Committee.
``(2) Functions.--
``(A) In general.--The Committee shall provide the
Commission with advice on the rules, regulations, and
policies of the Commission with regard to the mission
of the Commission of protecting investors, maintaining
fair, orderly, and efficient markets, and facilitating
capital formation, as those rules, regulations, and
policies relate to--
``(i) capital raising--
``(I) by--
``(aa) emerging companies;
and
``(bb) smaller public
companies; and
``(II) through securities
offerings, including--
``(aa) private and limited
offerings; and
``(bb) initial and other
public offerings;
``(ii) trading in the securities of
emerging companies and smaller public
companies; and
``(iii) public reporting and corporate
governance requirements of emerging companies
and smaller public companies.
``(B) Limitation.--The Committee shall not provide
any advice with respect to any policies, practices,
actions, or decisions concerning the enforcement
program of the Commission.
``(c) Membership.--
``(1) In general.--The members of the Committee shall be--
``(A) the Advocate for Small Business Capital
Formation;
``(B) not fewer than 10, and not more than 20,
members appointed by the Commission, from among
individuals who--
``(i) represent emerging companies engaging
in private and limited securities offerings or
considering an IPO, including the officers and
directors of the emerging companies;
``(ii) represent the professional advisors
of emerging companies, including--
``(I) attorneys;
``(II) accountants;
``(III) investment bankers; and
``(IV) financial advisors;
``(iii) represent the investors in emerging
companies, including--
``(I) angel investors;
``(II) venture capital funds; and
``(III) family offices;
``(iv) are officers or directors of
minority-owned small businesses and women-owned
small businesses;
``(v) represent smaller public companies,
including the officers and directors of the
companies;
``(vi) represent the professional advisors
of smaller public companies, including--
``(I) attorneys;
``(II) auditors;
``(III) underwriters; and
``(IV) financial advisors;
``(vii) represent the pre-IPO and post-IPO
investors in smaller public companies, which
include investors that are--
``(I) institutional, such as
venture capital funds; and
``(II) individual, such as angel
investors; and
``(viii) represent participants in the
marketplace for the securities of emerging
companies and smaller public companies,
including--
``(I) securities exchanges;
``(II) alternative trading systems;
``(III) analysts;
``(IV) information processors; and
``(V) transfer agents; and
``(C) 3 non-voting members--
``(i) 1 of whom shall be appointed by the
Investor Advocate;
``(ii) 1 of whom shall be appointed by the
North American Securities Administrators
Association; and
``(iii) 1 of whom shall be appointed by the
Administrator of the Small Business
Administration.
``(2) Term.--Each member of the Committee appointed under
subparagraph (B), (C)(ii), or (C)(iii) of paragraph (1) shall
serve for a term of 4 years.
``(3) Members not commission employees.--Members appointed
under subparagraph (B), (C)(ii), or (C)(iii) of paragraph (1)
shall not be treated as employees or agents of the Commission
solely because of membership on the Committee.
``(d) Chairman; Vice Chairman; Secretary; Assistant Secretary.--
``(1) In general.--The members of the Committee shall
elect, from among the members of the Committee--
``(A) a chairman;
``(B) a vice chairman;
``(C) a secretary; and
``(D) an assistant secretary.
``(2) Term.--Each member elected under paragraph (1) shall
serve for a term of 3 years in the capacity for which the
member was elected under paragraph (1).
``(e) Meetings.--
``(1) Frequency of meetings.--The Committee shall meet--
``(A) not less frequently than 4 times annually, at
the call of the chairman of the Committee; and
``(B) from time to time, at the call of the
Commission.
``(2) Notice.--The chairman of the Committee shall give the
members of the Committee written notice of each meeting, not
later than 2 weeks before the date of the meeting.
``(f) Compensation and Travel Expenses.--Each member of the
Committee who is not a full-time employee of the United States shall--
``(1) be entitled to receive compensation at a rate not to
exceed the daily equivalent of the annual rate of basic pay in
effect for a position at level V of the Executive Schedule
under section 5316 of title 5, United States Code, for each day
during which the member is engaged in the actual performance of
the duties of the Committee; and
``(2) while away from the home or regular place of business
of the member in the performance of services for the Committee,
be allowed travel expenses, including per diem in lieu of
subsistence, in the same manner as persons employed
intermittently in the Government service are allowed expenses
under section 5703 of title 5, United States Code.
``(g) Staff.--The Commission shall make available to the Committee
such staff as the chairman of the Committee determines is necessary to
carry out this section.
``(h) Review by Commission.--The Commission shall--
``(1) review the findings and recommendations of the
Committee; and
``(2) each time the Committee submits a finding or
recommendation to the Commission, promptly issue a public
statement--
``(A) assessing the finding or recommendation of
the Committee; and
``(B) disclosing the action, if any, the Commission
intends to take with respect to the finding or
recommendation.
``(i) Federal Advisory Committee Act.--The Federal Advisory
Committee Act (5 U.S.C. App.) shall not apply with respect to the
Committee and the activities of the Committee.''.
(c) Annual Government-Business Forum on Small Business Capital
Formation.--Section 503(a) of the Small Business Investment Incentive
Act of 1980 (15 U.S.C. 80c-1(a)) is amended by inserting ``, acting
through the Office of the Advocate for Small Business Capital Formation
and in consultation with the Small Business Capital Formation Advisory
Committee,'' after ``Securities and Exchange Commission''.
<all>