S-5139 : Still Just a Bill

The "Empowering Main Street in America Act of 2024," or S.5139, proposes several changes to securities laws with the goal of promoting capital formation, expanding investment opportunities for retail investors, and fostering investor confidence. Key provisions include:

• Emerging Growth Companies: Expands the definition of "emerging growth company" to include companies with gross revenues of less than $2,000,000,000, indexed for inflation. It also extends the period for which a company can be considered an emerging growth company.
• Micro-Offering Exemption: Creates a new exemption from securities registration for offerings up to $500,000, adjusted for inflation.
• Investment Companies: Increases the threshold for the number of investors a company can have before being considered an investment company, and raises the asset threshold for certain exemptions.
• Public Float: Directs the SEC to amend regulations regarding public float thresholds, indexing the $700,000,000 threshold for inflation.
• Crowdfunding: Eases certain financial reporting requirements for smaller crowdfunding offerings.
• Venture Capital Fund Definition: Modifies the regulatory definition of "venture capital fund."
• Finders and Private Placement Brokers: Establishes safe harbor provisions for finders and private placement brokers involved in certain securities transactions.
• Rural Job Creators: Includes "rural-area small businesses" in certain SEC programs and initiatives.
• Small Entities: Requires studies, reports, and rules regarding the definition of "small entity" for SEC purposes, with regular inflation adjustments.
• Accredited Investors: Modifies the definition of "accredited investor," including the potential for certification through an examination and adding new categories based on investment amounts.
• Retail Investor Opportunities: Mandates a study on limiting retail investor access to private placements.
• Investor Confidence: Directs the Financial Literacy and Education Commission to study and make recommendations on enhancing financial literacy and market confidence.
• Closed-End Companies: Provides closed-end companies with greater authority to invest in private funds.
• 403(b) Plans: Enhances the availability of 403(b) plans.
• Financial Statement Readability: Requires a study and regulations to improve the readability of financial statements for retail investors.
• Ombudsman Duties: Expands the duties of the SEC Ombudsman related to Regulation Crowdfunding.
• Economic Data Publication: Requires the SEC to publish annual data on securities markets.
• IPO Fees: Mandates a study on IPO fees for small- and medium-sized companies.
• Shareholder Proposals: Allows issuers to exclude shareholder proposals without regard to whether those proposals relate to a significant social policy issue.
• Testimony and Reports: Requires the SEC Chairman to testify before Congress and submit semiannual reports on the agency's activities.
• Rulemaking Requirements: Establishes new requirements for SEC rulemaking, including cost-benefit analyses.
• Inspector General Confirmation: Requires Senate confirmation of the SEC Inspector General.