Bill Overview
Title: To amend the Securities Exchange Act of 1934 to exclude qualified institutional buyers and institutional accredited investors when calculating holders of a security for purposes of the mandatory registration threshold under such Act, and for other purposes.
Description: This bill excludes certain institutional investors and buyers from inclusion as holders of a security for purposes of mandatory registration thresholds applicable to an issuer of securities.
Sponsors: Rep. McHenry, Patrick T. [R-NC-10]
Target Audience
Population: Qualified institutional buyers and institutional accredited investors
Estimated Size: 10000
- The bill affects the way securities registration obligations are calculated under the Securities Exchange Act of 1934.
- Qualified institutional buyers (QIBs) and institutional accredited investors are typically large entities such as banks, insurance companies, and investment funds.
- The number of QIBs and institutional accredited investors is significantly smaller globally compared to individual or small institutional investors.
- The financial sector, particularly entities involved in setting up or managing investment portfolios and those issuing securities, will be directly impacted by this legislative change.
- The general population might not be directly affected because mandatory registration primarily concerns large-scale financial instruments and their issuers.
- However, the broader investment environment could affect individuals indirectly through changes in the availability or nature of securities investments.
Reasoning
- The policy affects primarily large financial institutions and therefore does not have a direct financial cost in terms of deployment, which aligns with the budget constraint of $0 USD in year 1 and achieving savings by potentially reducing regulatory burdens.
- The targeted group is quite niche, characterized by institutional investors such as hedge funds, insurance firms, and banks within the U.S. financial centers, primarily New York.
- There might be indirect ripple effects through the market that could affect broader investment opportunities available to average investors, affecting their perceived financial wellbeing indirectly.
Simulated Interviews
Investment Fund Manager (New York, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- This policy seems like it will reduce the burden on funds like mine when dealing with compliance.
- While I don't expect this to drastically change the landscape, it can make our operations slightly smoother.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 10 | 8 |
Securities Lawyer (Chicago, IL)
Age: 52 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- This change will likely reduce some workload for my clients, but as a lawyer, it reduces my billable hours as well.
- I understand the rationale but am personally neutral in terms of wellbeing impact.
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 |
Tech Startup CFO (San Francisco, CA)
Age: 30 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- Our current investors might appreciate the policy for easing registration processes.
- For our startup, it has minor direct implications, but it shapes the ecosystem we're part of.
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 | 6 | 6 |
| Year 20 | 6 | 6 |
Retired Banker (Boston, MA)
Age: 60 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 1.0 years
Commonness: 5/20
Statement of Opinion:
- I see this as a positive for the industry, though not directly impacting my day-to-day life.
- Efficiencies in the market are generally good for everyone.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Financial Analyst (Dallas, TX)
Age: 38 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 7/20
Statement of Opinion:
- The policy's effect might be more relevant for the larger firms rather than smaller outfits like ours.
- However, it does signal a relaxation which might be welcomed by the sector broadly.
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 | 6 | 6 |
| Year 20 | 6 | 6 |
Regulatory Compliance Officer (Miami, FL)
Age: 34 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- This could mean adjustments in my role focusing more on practical rather than administrative elements.
- Any reduction in compliance complexity is generally positive.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 7 |
Public Policy Expert (Seattle, WA)
Age: 40 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- I appreciate the policy for potentially simplifying some aspects of securities law.
- From a broad perspective, it's a niche that doesn't capture many public concerns.
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 | 6 | 6 |
| Year 20 | 6 | 6 |
Retail Investor (Denver, CO)
Age: 29 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- I don't expect to feel any change directly, it's more something I read about than act upon.
- If it leads to better investment products, it might be indirectly beneficial.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Insurance Executive (Los Angeles, CA)
Age: 48 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- My job requires keeping up with such regulatory changes, though this policy is less impactful than others I've seen.
- It does streamline some tasks, making processes more efficient.
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 |
Oil Industry Finance Manager (Houston, TX)
Age: 33 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 5/20
Statement of Opinion:
- Oil industry players might see minor advantages from such policy changes, although it's not a major factor in my daily operations.
- Any policy reducing regulatory weights is generally positive for market liquidity.
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 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $0 (Low: $0, High: $0)
Year 2: $0 (Low: $0, High: $0)
Year 3: $-5000000 (Low: $-7000000, High: $-3000000)
Year 5: $-5000000 (Low: $-7000000, High: $-3000000)
Year 10: $-5000000 (Low: $-7000000, High: $-3000000)
Year 100: $-5000000 (Low: $-7000000, High: $-3000000)
Key Considerations
- The net financial impact on regulatory agencies due to changes in registration processes.
- Long-term economic growth versus immediate fiscal impact.
- The sectoral distribution within the financial industry that could alter as a result of these regulatory changes.