Bill Overview
Title: More Accurate Metrics in Securities Law Act
Description: This bill revises the registration requirements for issuers of securities. Currently, nonexempt, nonbank issuers must register their securities with the Securities and Exchange Commission (SEC) after a fiscal year in which the issuer has total assets exceeding $10 million and a class of equity security held by either (1) 2,000 persons, or (2) 500 persons who are not accredited investors. The bill increases the asset threshold to $15 million and requires the SEC to determine by rule the number of beneficial owners who hold a security or the amount of market capitalization beyond which registration by the issuer is required.
Sponsors: Rep. Steube, W. Gregory [R-FL-17]
Target Audience
Population: People involved with nonbank securities issuing companies and their investors
Estimated Size: 3000000
- The bill impacts nonexempt, nonbank issuers of securities who need to register their securities with the SEC.
- Currently, issuers who exceed $10 million in assets need to register; the bill changes this threshold to $15 million.
- This change affects how many companies are required to register their securities with the SEC, potentially reducing the number of mandatory registrations.
- The bill gives the SEC authority to determine how many beneficial owners or how much market capitalization requires registration, which could impact the market behavior of companies.
- Investors, especially those holding securities of companies on the cusp of these thresholds, will be affected as the transparency and regulation they depend on may change.
- The broader population involved in securities markets, either as investors or employees of affected issuing companies, will experience changes related to information availability and regulatory compliance.
Reasoning
- The target population for this policy includes both the issuers of securities who are nonexempt and nonbank entities, as well as investors in these securities.
- The change in registration requirements will primarily impact companies close to the $10 million to $15 million asset threshold, as well as their shareholders.
- Employees of companies no longer required to register may experience changes in job security and workload due to reduced compliance requirements.
- The budget constraint suggests a focused impact, mostly on companies and individuals highly involved in securities markets.
- Given the specificity of the regulation change, not all individuals in the securities industry are affected equally - larger firms or those well above registration thresholds might see little to no impact.
- The wellbeing analysis considers not just direct economic impacts, but also psychological impacts, such as perceptions of transparency and trust in the marketplace.
Simulated Interviews
Financial Analyst (New York)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- The change in registration could mean less transparency for smaller companies, which makes my job harder.
- I'm concerned that less regulation might lead to more market volatility.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 5 | 7 |
| Year 20 | 5 | 7 |
Start-up Founder (California)
Age: 32 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- This policy could provide us with more time to grow before having to deal with SEC compliance.
- It reduces our immediate burden, but I worry about long-term investor trust.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Regulatory Compliance Officer (Illinois)
Age: 54 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 8/20
Statement of Opinion:
- I'll have to learn new rules, but this could reduce workload eventually.
- There's potential for short-term confusion and errors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Retail Investor (Texas)
Age: 29 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 20/20
Statement of Opinion:
- With less information, it’s risky to invest in smaller companies now.
- I feel uneasy about potential unknowns in my portfolio.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 4 | 5 |
| Year 3 | 4 | 5 |
| Year 5 | 4 | 5 |
| Year 10 | 3 | 5 |
| Year 20 | 3 | 5 |
Entrepreneur (Florida)
Age: 37 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- This allows us to postpone costly SEC registration, letting us reinvest in growth.
- Could enhance our medium-term financial resilience.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Stock Market Coach (New York)
Age: 50 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 7.0 years
Commonness: 15/20
Statement of Opinion:
- Regulation is essential for market trust, less regulation is worrying.
- Clients rely on regulatory signals for investment decisions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 5 | 7 |
| Year 20 | 5 | 7 |
Business Consultant (Colorado)
Age: 40 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 6.0 years
Commonness: 10/20
Statement of Opinion:
- My clients appreciate reduced burdens but it complicates strategic advising.
- There are pros and cons to less immediate regulation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 5 | 6 |
| Year 20 | 5 | 6 |
Legal Intern (Washington)
Age: 28 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 18/20
Statement of Opinion:
- The shift offers real-world case studies but could reduce future career opportunities if less regulation persists.
- It's a balancing act between corporate freedom and legal oversight.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 6 |
| Year 10 | 4 | 6 |
| Year 20 | 4 | 6 |
Retired Financial Advisor (Ohio)
Age: 65 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- Reduced regulation generally worries me as it may heighten investment risks.
- Consistency in regulation has helped market stability historically.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 6 | 8 |
Research Economist (Massachusetts)
Age: 30 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 8/20
Statement of Opinion:
- Interesting from a research perspective but the impacts on investor behavior are uncertain.
- Policy changes provide good material for exploring market psychology.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Cost Estimates
Year 1: $2000000 (Low: $1500000, High: $2500000)
Year 2: $1800000 (Low: $1300000, High: $2300000)
Year 3: $1700000 (Low: $1200000, High: $2200000)
Year 5: $1500000 (Low: $1000000, High: $2000000)
Year 10: $1200000 (Low: $800000, High: $1600000)
Year 100: $1000000 (Low: $700000, High: $1400000)
Key Considerations
- The SEC's capacity and readiness to execute and monitor new thresholds is critical.
- Balance between regulatory relief and maintaining sufficient market transparency and investor protection must be considered.