Small Cap Liquidity Reform Act of 2013
Floor Speech
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Mr. CARNEY. Mr. Speaker, I yield myself such time as I may consume.
I rise in support of H.R. 3448. I would like to thank Mr. Garrett, chairman of the Capital Markets Subcommittee. Particularly, I would like to thank the gentleman from Wisconsin (Mr. Duffy) for his good work on this piece of legislation. I certainly enjoyed working with him on it.
I particularly want to applaud Mr. Duffy for his willingness to address concerns raised by stakeholders, members of the committee, and those we heard from during the hearing on this bill. I appreciate his commitment to working in a bipartisan way in developing good and workable policy in this legislation.
As has been already said, the purpose of our bill is really pretty simple. We know that small businesses are the engine of job creation in this country. We want to encourage investors to take a closer look at small businesses and invest in them so that they can continue to grow and create jobs once they have gone public.
In my home State of Delaware, as a corporate center, we have a lot of people who spend a lot of time paying attention to corporate formation and corporate governance. In a former life as the State secretary of finance and as Lieutenant Governor, I worked with a lot of these people. They have been following the trends over the past 10 years, and they have seen and observed the decline in IPOs and the changes in the growth of emerging growth companies after going public.
That is why last year I worked with my colleague, Mr. Fincher from Tennessee, on a provision in the JOBS Act that created an onramp for companies to go public. The bill has already been credited with helping fuel the recent uptick we have seen in the initial public offerings, which is very good for job growth in this economy. H.R. 3448 builds on that work by helping companies grow after their IPO.
Our hope, as has been described, is that increasing the increments that stocks trade in will draw more attention to these small emerging growth companies. We hope that brokers will spend more time and resources researching these companies and, ultimately, encourage greater investment in them. This increased coverage from brokers and analysts will help small companies grow and create jobs.
We have heard concerns about some unintended consequences that increased tick size could have, which is why this bill instructs the SEC to conduct a pilot program to better examine the effects and effectiveness of larger spreads. Additionally, this bill gives the SEC the flexibility to implement a pilot program in a way that will produce the best information on how to proceed afterwards.
Thanks to members and staff on both sides of the aisle working closely together, we were able to come up
with a bill that makes sense and that addresses the concerns that we heard from other members, from stakeholders, and from the Financial Services Committee hearing that we had.
The four amendments accepted in the committee were all consistent with our original objective. Each improved the bill based on input that we received from members and stakeholders.
This bill is truly a bipartisan effort. As Mr. Garrett pointed out, it passed out of the committee on a 57-0 vote. As with any piece of legislation, once we got into the weeds, it turned out to be a little bit more complicated than we initially thought, but the end result is a good product that Members on both sides of the aisle can support.
I want to close by again thanking Mr. Duffy and his staff for their hard work and for working together with us and involving us in the discussions about the particulars of this bill.
I urge Members on both sides of the aisle to support H.R. 3448, the Small Cap Liquidity Reform Act of 2013.
I yield back the balance of my time.
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