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Mr. McCARTHY of California. Mr. Chairman, this amendment is designed to make several small changes to make sure the regulation D, rule 506 provision in this bill meets its original intent.
In consultation with the Securities and Exchange Commission and our friends on the other side of the aisle, we identified several areas where the language in the bill could have had some unintended consequences that may have limited the effectiveness of the provision or expanded its reach beyond what we originally intended.
This amendment does three things:
Clarifies that general advertising provision should only apply to Regulation D, rule 506 of the securities offerings;
Protects investors by allowing for general advertising in the secondary sale of these securities, so long as only qualified institutional buyers purchase the securities;
Provides consistency in the interpretation for regulators that general advertising should not cause these private offerings to be considered public offerings.
Our goal with this amendment is to ensure that more small businesses have the opportunity to find the investors they need while preserving investor protections.
Mr. Chairman, as many people know on this floor, I created my first business at age 20. I was fortunate enough to be successful enough to pay my way through college.
Mr. Chairman, if I look today, I don't know if I could start that same small business. Entrance to market is great, access to capital. What our goal to do it in this bill and amendment is to expand that. And as we measure across America, the greatest growth we have is small business.
Mr. Chairman, I was reading the other day, if you looked at the challenge that we have, this current administration and their policies hampering our ability to grow, you look back to the end of the last recession, 2001, you look at the beginning of this recession in 2007, a lot of people in America say that was a time of growth in America, from 2001 to 2007.
Well, if you ever measured who created those jobs, small businesses. Companies under 500 employees added 7 million jobs, and 70 percent of those new 7 million jobs came from companies 5 years old or younger.
But, Mr. Chairman, under this new administration, we're at an all-time low of new start-ups. So we're hopeful, with this new legislation, that that will all change, that the future will be brighter, small businesses will continue to grow, and we'll put America back on the right path.
I reserve the balance of my time.
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