The House of Representatives passed the Incentivizing New Ventures and Economic Strength Through Capital Formation Act on Thursday—the INVEST Act, a legislative package designed to strengthen U.S. capital markets and boost economic growth.
Introduced by Financial Services Committee Chair French Hill, R-Arkansas; Capital Markets Subcommittee Chair Ann Wagner, R-Missouri; Representative Gregory Meeks, D-New York; and Representative Josh Gottheimer, D-New Jersey, the bill merges more than 20 bills that had already cleared committee.
The measure passed by a 302 to 123 vote, with 87 Democrats joining Republicans in support of the bill.
The bill now moves to the Senate, which must approve it before it can be sent to President Donald Trump for his signature into law.
Spanning 64 pages and three major titles, the legislation streamlines investment disclosures, encourages more initial public offerings, and targets barriers facing small businesses and startups. Key provisions include expanding Securities and Exchange Commission support for rural and underserved entrepreneurs; easing restrictions on how startups can present to investors; and raising thresholds for crowdfunding and venture capital funds.
The bill would also broaden the definition of accredited investor, facilitate electronic delivery of investor documents, and give teachers and nonprofit employees access to new retirement plan investment trusts. It includes new safeguards for senior investors, along with measures to enhance transparency in multi-class share structures and reduce initial public offering costs for smaller firms.
TIAA, which provides retirement research and annuities in the 403(b) plan market and has an asset management subsidiary, Nuveen, lauded the bill’s inclusion of what had been known as the Increasing Investor Opportunities Act. That act’s primary goal was removing limits on closed-end funds investing in private funds, thereby broadening investment opportunities for closed-end funds and their investors, according to TIAA’s letter of support signed by President and CEO Thasunda Brown Duckett.
The act also “would strengthen the ability of CEFs to protect the interests of their long-term shareholders against hostile campaigns waged by activist investors” the letter stated. “The legislation would also enhance investment opportunities for shareholders by revising past Securities and Exchange Commission informal guidance that limited CEFs’ investments in private funds.”
Tags: Congress, Disclosure