[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3784 Reported in House (RH)]

<DOC>





                                                 Union Calendar No. 311
114th CONGRESS
  2d Session
                                H. R. 3784

                          [Report No. 114-408]

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 HOUSE OF REPRESENTATIVES

                            October 21, 2015

  Mr. Carney (for himself, Mr. Duffy, Mr. Quigley, and Mr. Crenshaw) 
 introduced the following bill; which was referred to the Committee on 
                           Financial Services

                            February 1, 2016

Additional sponsors: Mr. Sherman, Mr. Fincher, Mrs. Carolyn B. Maloney 
   of New York, Miss Rice of New York, Mr. Kildee, and Ms. Velazquez

                            February 1, 2016

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
[For text of introduced bill, see copy of bill as introduced on October 
                               21, 2015]


_______________________________________________________________________

                                 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 
2015''.

SEC. 2. ESTABLISHMENT OF OFFICE OF THE ADVOCATE FOR SMALL BUSINESS 
              CAPITAL FORMATION AND 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 (hereafter 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 
                        advocating for the interests of small 
                        businesses and 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 
                currently employed by the Commission.
            ``(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 such 
                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 to minority-owned and women-owned small 
                businesses;
                    ``(D) analyze the potential impact 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 mitigate problems identified under this 
                paragraph and to 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 after 2015, 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 small business services and the 
                        responsiveness of the Commission and self-
                        regulatory organizations to small business 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 their investors, 
                        during the reporting period;
                            ``(iv) an inventory of the items summarized 
                        under clause (iii) (including items summarized 
                        under such clause for any prior reporting 
                        period on which no action has been taken or 
                        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) that includes--
                                    ``(I) identification of any action 
                                taken by the Commission or the self-
                                regulatory organization and the result 
                                of such action;
                                    ``(II) the length of time that each 
                                item has remained on such inventory; 
                                and
                                    ``(III) for items on which no 
                                action has been taken, the reasons for 
                                inaction, and an identification of any 
                                official who is responsible for such 
                                action;
                            ``(v) recommendations for such changes to 
                        the regulations, guidance and orders of the 
                        Commission and such legislative actions as may 
                        be appropriate to resolve problems with the 
                        Commission and self-regulatory organizations 
                        encountered by small businesses and small 
                        business investors and to 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 by 
                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 such 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 
        such 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) Establishment and Purpose.--
            ``(1) Establishment.--There is established within the 
        Commission the Small Business Capital Formation Advisory 
        Committee (hereafter in this section referred to as the 
        `Committee').
            ``(2) Functions.--
                    ``(A) In general.--The Committee shall provide the 
                Commission with advice on the Commission's rules, 
                regulations, and policies with regard to the 
                Commission's mission of protecting investors, 
                maintaining fair, orderly, and efficient markets, and 
                facilitating capital formation, as such rules, 
                regulations, and policies relate to--
                            ``(i) capital raising by emerging, 
                        privately held small businesses (`emerging 
                        companies') and publicly traded companies with 
                        less than $250,000,000 in public market 
                        capitalization (`smaller public companies') 
                        through securities offerings, including private 
                        and limited offerings and 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 Commission's 
                enforcement program.
    ``(b) 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--
                            ``(i) who represent--
                                    ``(I) emerging companies engaging 
                                in private and limited securities 
                                offerings or considering initial public 
                                offerings (`IPO') (including the 
                                companies' officers and directors);
                                    ``(II) the professional advisors of 
                                such companies (including attorneys, 
                                accountants, investment bankers, and 
                                financial advisors); and
                                    ``(III) the investors in such 
                                companies (including angel investors, 
                                venture capital funds, and family 
                                offices);
                            ``(ii) who are officers or directors of 
                        minority-owned small businesses and women-owned 
                        small businesses;
                            ``(iii) who represent--
                                    ``(I) smaller public companies 
                                (including the companies' officers and 
                                directors);
                                    ``(II) the professional advisors of 
                                such companies (including attorneys, 
                                auditors, underwriters, and financial 
                                advisors); and
                                    ``(III) the pre-IPO and post-IPO 
                                investors in such companies (both 
                                institutional, such as venture capital 
                                funds, and individual, such as angel 
                                investors); and
                            ``(iv) who represent participants in the 
                        marketplace for the securities of emerging 
                        companies and smaller public companies, such as 
                        securities exchanges, alternative trading 
                        systems, analysts, information processors, and 
                        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.
    ``(c) 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).
    ``(d) Meetings.--
            ``(1) Frequency of meetings.--The Committee shall meet--
                    ``(A) not less frequently than four 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.
    ``(e) 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.
    ``(f) Staff.--The Commission shall make available to the Committee 
such staff as the chairman of the Committee determines are necessary to 
carry out this section.
    ``(g) 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.
    ``(h) Federal Advisory Committee Act.--The Federal Advisory 
Committee Act (5 U.S.C. App.) shall not apply with respect to the 
Committee and its activities.''.
    (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''.
                                                 Union Calendar No. 311

114th CONGRESS

  2d Session

                               H. R. 3784

                          [Report No. 114-408]

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                            February 1, 2016

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed