WASHINGTON, D.C. – John R. Dearie, President of the Center for American Entrepreneurship, today issued the following statement following President Donald J. Trump’s signing into law the Economic Growth, Regulatory Relief, and Consumer Protection Act on May 24, 2018:
“The Center for American Entrepreneurship (CAE) applauds the enactment of the Economic Growth, Regulatory Relief, and Consumer Protection Act. This bipartisan reform legislation provides meaningful regulatory relief for the nation’s smaller community banks while ensuring the continued safety and soundness of the nation’s largest banking companies.
In particular, CAE welcomes the enactment of section 504 of the Act, “Supporting America’s Innovators,” which had previously passed the House (H.R. 1219) and Senate (S. 444) by wide bipartisan margins. The section amends section 3(c)(1) of the Investment Company Act of 1940, which had stipulated that investment funds with not more than 100 investors and not making a public offering of its securities are exempt from registration as an investment company with the Securities and Exchange Commissions and from the filing of costly disclosure requirements associated with registration. Section 504 amends the 3(c)(1) exemption by raising the number of permitted investors in qualifying funds to 250, provided the fund size does not exceed $10 million.
The significant increase in the number of permitted investors is an important improvement for small venture and angel capital funds and will facilitate capital formation for American startups. Nevertheless, the $10 million cap on exempted funds remains unnecessarily low and CAE, along with other interested organizations, will continue to work toward further raising the cap, as well as the number of permitted investors.
CAE thanks Senate Banking Committee Chairman Mike Crapo (R-ID) and House Financial Services Committee Chairman Jeb Hensarling (R-TX) for their leadership – and the many Republican and Democratic members of the House and Senate who supported the legislation. We look forward to working with members of Congress and the Administration to further improve policy circumstances for America’s entrepreneurs.”
The Center for American Entrepreneurship (CAE) is a nonpartisan research, policy, and advocacy organization whose mission is to engage and educate policymakers in Washington, and at state and local levels across the nation, regarding the critical importance of entrepreneurs and start-ups to innovation, economic growth, and job creation – and to pursue a comprehensive policy agenda intended to significantly enhance the circumstances for new business formation, survival, and growth.
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