Bill Overview
Title: Private Markets Transparency and Accountability Act
Description: This bill requires certain private companies to register with the Securities and Exchange Commission (SEC) and thereby publicly disclose business practices and financial information. Under current law, companies with assets exceeding $10 million and with a class of securities held by either 2,000 persons, or 500 persons who are not accredited investors, must register with the SEC. In addition, the bill requires companies to register if (1) their valuation exceeds $700 million, or (2) their annual revenue exceeds $5 billion and they have at least 5,000 employees.
Sponsors: Sen. Reed, Jack [D-RI]
Target Audience
Population: People employed by or invested in large private companies subject to SEC registration
Estimated Size: 500000
- The bill affects private companies required to register with the SEC when their financial or structural conditions meet specified thresholds, potentially increasing transparency in private markets.
- This will primarily impact privately-held companies that are large in terms of asset value, financial valuation, or revenue, which may not currently disclose information publicly to this extent.
- These companies operate across various industries and sectors and are integral parts of the national and global economy, affecting numerous stakeholders including employees, investors, suppliers, and customers.
- In 2021, it was reported that there are approximately 27 million privately-held businesses in the United States, though the bill specifically targets a much smaller number meeting high valuation or revenue criteria.
- The new thresholds, like valuations over $700 million or revenues over $5 billion, likely target a few thousand companies globally.
Reasoning
- Private Markets Transparency and Accountability Act is expected to affect relatively few individuals directly based on specific large company criteria, reflecting in a limited number of stakeholders.
- The policy predominantly targets large private companies which have to reveal financial information publicly.
- Wellbeing impacts will likely vary from none to high depending on employment roles, investment stakes, and the subsequent success or challenges faced by the companies due to increased transparency demands.
- The scale of the companies affected suggests that peripheral impacts on employees and related sectors could still be substantial considering investor transparency.
- Considering a population scope of around 500,000 directly impacted individuals, the interviews provide a holistic view considering different personal alignments with large companies.
Simulated Interviews
Financial Analyst (New York, NY)
Age: 32 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- The new policy could increase the workload due to new compliance measures but might also enhance the industry's transparency.
- As an analyst, better transparency could help in making data-driven decisions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Tech Entrepreneur (San Francisco, CA)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 3/20
Statement of Opinion:
- I am concerned about the administrative burden and cost associated with the new SEC registration requirements.
- While transparency could benefit the market, it may stifle the agile growth desired in tech sectors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 8 |
| Year 2 | 6 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 8 | 9 |
Investor (Chicago, IL)
Age: 52 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- Better transparency could reduce investment risks and allow for more informed decisions.
- There might be initial volatility as companies adjust, but long term benefits seem positive.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Software Engineer (Austin, TX)
Age: 28 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 10/20
Statement of Opinion:
- Changes due to the policy might not directly impact my day-to-day work, but organizational shifts are possible.
- If transparency leads to growth, it might lead to job benefits and stability in the long run.
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 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Retired Banker (Miami, FL)
Age: 61 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 7/20
Statement of Opinion:
- This policy was much needed to ensure corporate responsibility and protect small investors.
- I believe in the long-term health benefits but there's skepticism about the short-term acceptance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 7 | 7 |
Supply Chain Manager (Denver, CO)
Age: 39 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 6/20
Statement of Opinion:
- While there are likely more compliance requirements, it could lead to more responsible business practices.
- Any change that affects company financials could also affect my job security and business operations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Private Real Estate Developer (Seattle, WA)
Age: 50 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- This adds complexity to project financing, but it might standardize and harmonize market operations.
- I support transparency but am wary of excessive government control hindering business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 7 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 9 | 9 |
Commercial Lawyer (Boston, MA)
Age: 60 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 6.0 years
Commonness: 4/20
Statement of Opinion:
- Increased work volume expected as companies adjust to new legal obligations.
- This could arguably benefit the industry as it may lead to more structured deals and company integrity.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 9 |
Business Student (Los Angeles, CA)
Age: 22 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- This policy is likely good for academic and career purposes due to increased focus on ethics and transparency.
- Understanding how regulations evolve guides better career choices.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Cybersecurity Expert (Houston, TX)
Age: 37 | Gender: other
Wellbeing Before Policy: 9
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- Demand for cybersecurity services is likely to increase, enhancing job security.
- These changes positively influence business resilience against digital threats.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 10 | 9 |
Cost Estimates
Year 1: $500000000 (Low: $400000000, High: $600000000)
Year 2: $450000000 (Low: $350000000, High: $550000000)
Year 3: $400000000 (Low: $300000000, High: $500000000)
Year 5: $350000000 (Low: $250000000, High: $450000000)
Year 10: $250000000 (Low: $200000000, High: $300000000)
Year 100: $100000000 (Low: $50000000, High: $150000000)
Key Considerations
- The policy focuses on large companies that have broader economic implications, potentially enhancing market integrity.
- The costs primarily arise from the need for additional regulatory oversight and enforcement capabilities at the SEC.
- Companies that become subject to these disclosures may face increased operational and compliance costs, indirectly impacting the economy.
- The long-term outcomes depend on how successfully the transparency leads to broader market confidence and stability enhancements.