[Congressional Record Volume 160, Number 145 (Tuesday, December 2, 2014)]
[House]
[Pages H8239-H8240]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 1345
SBIC ADVISERS RELIEF ACT OF 2014
Mr. LUETKEMEYER. Mr. Speaker, I move to suspend the rules and pass
the bill (H.R. 4200) to amend the Investment Advisers Act of 1940 to
prevent duplicative regulation of advisers of small business investment
companies.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4200
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 ``SBIC Advisers Relief Act of
2014''.
SEC. 2. ADVISERS OF SBICS AND VENTURE CAPITAL FUNDS.
Section 203(l) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-3(l)) is amended--
(1) by striking ``No investment adviser'' and inserting the
following:
``(1) In general.--No investment adviser''; and
(2) by adding at the end the following:
``(2) Advisers of sbics.--For purposes of this subsection,
a venture capital fund includes an entity described in
subparagraph (A), (B), or (C) of subsection (b)(7) (other
than an entity that has elected to be regulated or is
regulated as a business development company pursuant to
section 54 of the Investment Company Act of 1940).''.
SEC. 3. ADVISERS OF SBICS AND PRIVATE FUNDS.
Section 203(m) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-3(m)) is amended by adding at the end the
following:
``(3) Advisers of sbics.--For purposes of this subsection,
the assets under management of a private fund that is an
entity described in subparagraph (A), (B), or (C) of
subsection (b)(7) (other than an entity that has elected to
be regulated or is regulated as a business development
company pursuant to section 54 of the Investment Company Act
of 1940) shall be excluded from the limit set forth in
paragraph (1).''.
[[Page H8240]]
SEC. 4. RELATIONSHIP TO STATE LAW.
Section 203A(b)(1) of the Investment Advisers Act of 1940
(15 U.S.C. 80b-3a(b)(1)) is amended--
(1) in subparagraph (A), by striking ``or'' at the end;
(2) in subparagraph (B), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following:
``(C) that is not registered under section 203 because that
person is exempt from registration as provided in subsection
(b)(7) of such section, or is a supervised person of such
person.''.
The SPEAKER pro tempore (Mr. Hultgren). Pursuant to the rule, the
gentleman from Missouri (Mr. Luetkemeyer) and the gentlewoman from
Wisconsin (Ms. Moore) each will control 20 minutes.
The Chair recognizes the gentleman from Missouri.
General Leave
Mr. LUETKEMEYER. Mr. Speaker, I ask unanimous consent that all
Members have 5 legislative days within which to revise and extend their
remarks and submit extraneous materials for the Record on H.R. 4200,
currently under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Missouri?
There was no objection.
Mr. LUETKEMEYER. Mr. Speaker, I yield myself such time as I may
consume.
The legislation we consider today is a bipartisan, noncontroversial,
and commonsense change that will ultimately allow for greater small
business capital formation and job creation.
H.R. 4200, the SBIC Advisers Relief Act, streamlines reporting
requirements for advisers to small business investment companies, or
SBICs. These are advisers to investment funds who make long-term
investments in U.S. small businesses and who have to the tune of more
than $63 billion since 1958.
Under current law and for more than 55 years, SBICs have been
regulated and closely supervised by the Small Business Administration.
The existing regulatory regime surrounding SBICs includes an in-depth
examination of management, strong investment rules, operational
requirements, recordkeeping, examination and reporting mandates, and
conflict of interest rules. These entities and the management of these
entities are anything but unregulated.
The need for exemptions for SBICs and their advisers has been well-
recognized by Congress. Congress' intent by including some of these
exemptions in previous legislation was to reduce the regulatory burdens
facing smaller funds and SBICs. This bill fixes some unintended
consequences that have arisen and need to be addressed.
The SBIC Advisers Relief Act does so by doing three things: number
one, it allows advisers who jointly advise SBICs and venture funds to
be exempt from registration, combining two separate exemptions that
already exist; number two, it excludes SBIC assets from the SEC's
assets under management threshold calculation; number three, it allows
SBIC funds with less than $90 million in assets under management to be
regulated solely by the SBA, as they are today.
The Financial Services Committee has thoroughly examined the
bipartisan legislation in both a legislative hearing and a markup. H.R.
4200 garnered praise from members on both sides of the aisle and from
witnesses who testified on the bill in an April hearing. This
noncontroversial legislation passed the committee by a vote of 56-0 in
May.
It is also important to note that the legislation includes
suggestions made by the SEC. Most importantly, this legislation
includes sensible provisions that prevent redundant regulatory mandates
and allow for a greater investment in America's small businesses.
I want to thank Congresswoman Maloney for her help on this bill, and
I ask my colleagues for their support.
Mr. Speaker, I reserve the balance of my time.
Ms. MOORE. Mr. Speaker, I yield myself such time as I may consume.
This bill, as has been indicated, is a bipartisan bill. We support
the bill. I have no requests for time; therefore, I would urge my
colleagues to support the bill.
I yield back the balance of my time.
Mr. LUETKEMEYER. Mr. Speaker, I have no other speakers, and I yield
back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Missouri (Mr. Luetkemeyer) that the House suspend the
rules and pass the bill, H.R. 4200.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
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