Small Business Relief Act
Summary
What This Bill Does
This bill changes when a private company must register a class of securities under section 12(g) of the Securities Exchange Act of 1934. Current law generally looks at the number of holders of record. The bill amends the mandatory registration threshold so qualified institutional buyers and institutional accredited investors are not counted toward the relevant person thresholds. It also states that Securities Exchange Act section 36, the SEC's general exemptive authority, does not apply to the new inserted language.
Who Benefits and How
Private company finance officers and startup founders benefit because they can raise capital from qualified institutional buyers and institutional accredited investors without those investors pushing the company toward public-company registration thresholds. Venture-backed company boards benefit from more room to stay private while taking institutional capital. Qualified institutional buyer investors and institutional accredited investor compliance staff benefit because their participation is less likely to create registration pressure for portfolio companies. Venture capital funds and private equity funds benefit from a larger pool of private issuers willing to accept institutional money.
Who Bears the Burden and How
Retail investor advocates may bear a transparency burden because more large private companies can remain outside public-company reporting for longer. SEC corporation finance staff lose discretion because section 36 cannot be used to alter the new exclusion. Public-market investors may lose earlier access to issuer disclosures if companies delay Exchange Act registration. Private company legal staff still must determine which investors are qualified institutional buyers or institutional accredited investors and document the shareholder count.
Key Provisions
- Modifies Securities Exchange Act section 12(g)(1) so qualified institutional buyers are not counted in the person threshold.
- Modifies the same threshold so institutional accredited investors are not counted.
- Provides the exclusion in both relevant paragraph (A) and paragraph (B) threshold language.
- Blocks SEC section 36 exemptive authority from applying to the inserted exclusion.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Excludes qualified institutional buyers and institutional accredited investors from the shareholder-count threshold that can force private companies to register under section 12(g) of the Securities Exchange Act, and prevents SEC exemptive authority from overriding that exclusion.
Key Policy Areas
Capital Markets, Securities Regulation, Small Business
Primary Purpose
Excludes qualified institutional buyers and institutional accredited investors from the shareholder-count threshold that can force private companies to register under section 12(g) of the Securities Exchange Act, and prevents SEC exemptive authority from overriding that exclusion.
Policy Domains
House resolution provisions
Identified Gains
- Private company finance officers
- Startup founders
- Venture-backed company boards
- Qualified institutional buyer investors
- Institutional accredited investor compliance staff
- Venture capital fund managers
Identified Costs
- Retail investor advocates
- SEC corporation finance staff
- Public-market investors
- Private company legal staff
Sponsors
Legislative Progress
ReportedPlaced on the Union Calendar, Calendar No. 450.
Reported (Amended) by the Committee on Financial Services. H. Rept. …
Additional sponsor: Mr. Sessions
Reported (Amended) by the Committee on Financial Services. H. Rept. …
Ordered to be Reported (Amended) by the Yeas and Nays: …
Committee Consideration and Mark-up Session Held
Committee Consideration and Mark-up Session Held
Introduced in House
Referred to the House Committee on Financial Services.
Mr. Garbarino introduced the following bill; which was referred to …
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Institutional accredited investor compliance staff, Private company finance officers, Qualified institutional buyer investors
Positive-direction: Institutional accredited investor compliance staff, Private company finance officers, Qualified institutional buyer investors, Startup founders
Negative-direction: Retail investor advocates
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "sec"
- → Securities and Exchange Commission
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology