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SBIA Scores Significant Victory With Passage of SBIC Advisers Relief Act

December 07, 2015, 07:18 AM
Filed Under: Industry News

The Small Business Investor Alliance (SBIA), the leading association of lower middle-market private equity funds and investors, gains a significant legislative victory today as the House and Senate passed the Small Business Investment Company (SBIC) Advisers Relief Act. The SBIC Advisers Relief Act is one of the key provisions of the SBIA’s Capital Formation Agenda. This legislation was included as Title LXXIV of the multi-year highway transportation legislation (H.R. 22).

“Today Congress stood up and finally gave small business investors relief from too much red tape,” said Brett Palmer, President of the Small Business Investor Alliance. “Passage of the SBIC Advisers Relief Act clarifies that SBICs will not be regulated twice. One regulator is enough and this relief provides SBICs more time to focus on what they do best – capitalize and grow small businesses.”

H.R. 432 corrects language in Dodd-Frank to remove duplicative compliance burdens while maintaining investor protections. This bill removes double regulation by both state and federal regulators and removes the accidental regulatory burdens imposed by having two types of exempt funds – Venture and SBIC. Further, it removes regulated SBIC capital from the calculation used to trigger Registered Investment Adviser registration at the SEC. This reform will be particularly helpful to fund managers that advise small private equity funds or conventional venture funds in addition to a SBIC fund. This bill is a bipartisan technical correction that maintains investor protections while reducing regulatory burdens on small business investors.

SBIA is thankful for the support of our champions in the House and Senate and the many cosponsors of the bill. The SBIC Advisers Relief was guided by our House champions Representatives Blaine Luetkemeyer (R-MO) and Carolyn Maloney (D-NY) and our Senate champions Senators Mark Kirk (R-IL) and Joe Donnelly (D-IN). House Financial Services Committee Chair Jeb Hensarling (R-TX) gave the SBIC Advisers Relief Act the final push by including it as an amendment to the House highway legislation.

The Small Business Investor Alliance (SBIA) is the premier organization of lower middle market private equity funds and investors. SBIA works on behalf of its members as a tireless advocate for policies that promote competitive markets and robust domestic investment for growing small businesses. SBIA has been playing a pivotal role in promoting the growth and vitality of the private equity industry for over 50 years.

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