U.S. Senate Banking Committee approves capital formation bills

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By Sarah N. Lynch | WASHINGTON

WASHINGTON A U.S. Senate panel on Thursday
approved with bipartisan support a raft of bills aimed at
spurring capital formation, marking its first step this year
toward modernizing market rules that critics have said are
outdated and get in the way of business expansion and
investment.

The move is part of the ongoing effort by the Congress to
streamline the U.S. financial sector and is seen as largely
separate from U.S. President Donald Trump’s push to repeal or
replace regulations which he contends could impede economic
growth.

The Senate Banking Committee, led by Idaho Republican
Chairman Mike Crapo, is now poised to send to the Senate floor
five bills that garnered support from both Democrats and
Republicans, with Democratic Senators Elizabeth Warren and Jack
Reed the only dissenters.

Sherrod Brown, the panel’s ranking Democrat, praised the
bipartisan work that went into the bills, and said he is
optimistic “there are additional common sense measures” that can
tackled next.

The bills propose a variety of changes to the Securities and
Exchange Commission’s regulations, such as raising the dollar
amount of stock options that private companies can award
employees in a given year from $5 million to $10 million, and
easing restrictions to allow brokers to publish research on the
global $3.7 trillion exchange-traded fund market.

They would also boost the number of people that can invest
in venture capital funds without triggering certain federal
rules, subject mutual funds in Puerto Rico to the same rules
that funds already face on the U.S. mainland and credit stock
exchanges for any fees and assessments they may have overpaid to
the SEC in the last decade.

Pennsylvania Republican Senator Pat Toomey, who co-sponsored
the bill involving private company stock options, said on
Thursday he is hopeful the measure “will be considered by the
full Senate soon.”

Thursday’s hearing was the first time since the November
election that the Republican-led Senate Banking Committee has
convened to consider financial legislation.

The U.S. House of Representatives Financial Services
Committee, meanwhile, is also gearing up to boost
capital-raising via a more comprehensive rewrite of the 2010
Dodd-Frank financial reform legislation.

Trump’s choice to lead the SEC, Wall Street deal making
attorney Jay Clayton, has previously privately discussed ideas
with Trump on how to help spur capital formation.

All of the bills approved by the panel on Thursday have been
considered in prior congressional years, but never passed into
law. Some of the bills also have companions in the House
introduced this year.



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