Bill Overview
Title: Facilitating Main Street Offerings Act
Description: This bill exempts certain securities issued under Regulation A from state regulation of secondary transactions. Regulation A exempts small issues of securities from registration requirements.
Sponsors: Sen. Moran, Jerry [R-KS]
Target Audience
Population: People investing in or working with SMEs using Regulation A offerings
Estimated Size: 3000000
- Regulation A allows smaller businesses to raise funds from the public with fewer reporting requirements.
- This legislation aims to make it easier for investors to buy and sell these securities by exempting them from additional state regulations.
- Small and medium-sized enterprises (SMEs) are likely to increase their participation in fundraising using Regulation A offerings due to reduced regulatory burden.
- Investors in the broader public who are interested in investing in SME offerings could potentially have more opportunities and less friction when trading these securities.
- The impact will be significant in countries like the U.S. where regulation can vary from state to state.
Reasoning
- The policy primarily targets small and medium-sized enterprises (SMEs) and investors interested in less-regulated markets, suggesting interviews with a mix of entrepreneurs, investors, and stakeholders in financial services.
- Estimated reach of 3 million people in the U.S. implies inclusion of common profiles like small business owners and average retail investors.
- Budget limits mean focus on key markets, likely states with high SME activity like California and New York.
- Varying impacts on individuals predicts both supportive and skeptical opinions, enabling richer data on potential policy adoption and satisfaction.
Simulated Interviews
SME Founder (San Francisco, CA)
Age: 54 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- I believe this policy will reduce the friction we face when investors trade our securities, potentially boosting investor confidence.
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 | 6 |
| Year 20 | 8 | 5 |
Retail Investor (Austin, TX)
Age: 42 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This policy should make it easier to buy and sell shares in smaller firms, which is a win for the little guy like me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 5 |
| Year 3 | 9 | 5 |
| Year 5 | 9 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Financial Analyst (New York, NY)
Age: 36 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 4/20
Statement of Opinion:
- It may pave the way for more dynamic market-making in secondary SME markets, but I am cautious of potential loopholes.
- A clearer regulatory path helps but also keeps the check and balances.
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 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Tech Entrepreneur (Raleigh, NC)
Age: 29 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 2/20
Statement of Opinion:
- I’m hopeful that this makes it easier to secure funding and offer more liquidity to early backers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 4 |
| Year 10 | 7 | 4 |
| Year 20 | 7 | 4 |
Regulatory Compliance Officer (Miami, FL)
Age: 61 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- Exempting from state regulations could make it risky if not monitored properly.
- Streamlined processes are good but balance is key.
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 |
Small Business Owner (Chicago, IL)
Age: 47 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 4/20
Statement of Opinion:
- This would cut some red tape, which is always appreciated.
- Investors might find us more attractive without the extra state hurdles.
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 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Venture Capitalist (Los Angeles, CA)
Age: 33 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 2/20
Statement of Opinion:
- The policy will likely open up investment exit pathways earlier than expected, which is beneficial for VC firms.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Equity Crowdfunding Specialist (Boston, MA)
Age: 39 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- We’re hopeful about engaging a wider range of investors with a regulatory framework that’s friendlier to adaptations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 7 | 5 |
Independent Consultant (Phoenix, AZ)
Age: 58 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 2/20
Statement of Opinion:
- Easier compliance is good for client businesses but must be balanced with ensuring investor protections.
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 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Public Policy Adviser (Seattle, WA)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 1/20
Statement of Opinion:
- The policy could strike a needed balance by offering SMEs chances to compete more effectively while maintaining fair investor protection.
- I am concerned about oversight transparency.
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 | 6 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $1000000 (Low: $500000, High: $1500000)
Year 2: $1000000 (Low: $500000, High: $1500000)
Year 3: $1000000 (Low: $500000, High: $1500000)
Year 5: $1000000 (Low: $500000, High: $1500000)
Year 10: $1000000 (Low: $500000, High: $1500000)
Year 100: $1000000 (Low: $500000, High: $1500000)
Key Considerations
- The direct cost to the federal government is minimal as the bill primarily modifies regulatory frameworks rather than funding new initiatives.
- Avoided costs and administrative savings at the state level might offset some expenses incurred by the federal government.
- Indirect effects such as increased economic activity and tax revenues could be significant over time.