THE DAILY WHIP: THURSDAY, SEPTEMBER 8, 2016

House Meets At:	First Vote Predicted:	Last Vote Predicted:
10:00 a.m.: Morning Hour 12:00 p.m.: Legislative Business Fifteen “One Minutes”	1:00 – 2:00 p.m.	3:00 – 4:00 p.m.

H.Res. 844 – Rule providing for consideration of both H.R. 2357 – Accelerating Access to Capital Act of 2016 (Rep. Wagner – Financial Services) and H.R. 5424 – Investment Advisers Modernization Act of 2016 (Rep. Hurt – Financial Services) (One hour of debate). The Rules Committee has recommended one Rule which would provide for consideration of two bills.

For H.R. 2357, the Rules Committee has recommended a structured Rule that provides for one hour of general debate equally divided and controlled by the Chair and Ranking Member of the Committee on Financial Services.  The Rule allows for 2 amendments, debatable for 10 minutes equally divided between the offeror and an opponent.  The Rule allows one motion to recommit, with or without instructions, and waives all points of order against the legislation.

For H.R. 5424, the Rules Committee has recommended a structured Rule that provides for one hour of general debate equally divided and controlled by the Chair and Ranking Member of the Committee on Financial Services.  The Rule allows for 1 amendment, debatable for 10 minutes equally divided between the offeror and an opponent.  The Rule allows one motion to recommit, with or without instructions, and waives all points of order against the legislation. Members are urged to VOTE NO.

H.R. 2357 – Accelerating Access to Capital Act of 2016 (Rep. Wagner – Financial Services) (One hour of debate).  H.R. 2357 is a package of three bills (H.R. 2357, H.R. 4850, and H.R. 4852) that would collectively weaken investor protections by reducing transparency and limiting the ability of the Securities and Exchange Commission (SEC) to effectively oversee and regulate capital markets.

Title I, which incorporates H.R. 2357, would harm investors by reducing the quality of information they depend on when making investment decisions with respect to “microcap companies,” companies with small market capitalizations that are generally not as well known or reported on as large publicly traded companies. Title I would permit microcap companies traded on an exchange to issue an unlimited number of shares within a 12 month period without issuing a separate prospectus for each stock offering.  It would also permit unlisted microcap companies to sell as much as 1/3 of the market value of their common equity in a 12 month period without issuing a separate prospectus for each stock offering. Proponents of this provision argue that relaxing the rules governing the information smaller companies must disclose each time they issue stock will facilitate their access to capital and would simply extend existing rules as they apply to large companies.  However, unlike microcap companies, which are often obscure, there is generally an abundance of public information about large companies beyond what the SEC requires because they are closely followed by professional financial analysts and are traded on well-regulated and transparent national stock exchanges.

Title II – which incorporates the text ofH.R. 4850, “the Micro Offering Safe Harbor Act” – would remove protections for investors by allowing a company to sell up to $500,000 in shares without being required to give any information to investors or regulators, and without imposing any restriction on the resale of those shares, provided investors have a pre-existing relationship with an officer, director, or major shareholder of the company selling stock.  It would also supersede state law by exempting micro-offerings from state regulations.

Title III – which incorporate the text of H.R. 4852, “the Private Placement Improvement Act” – would block the SEC from finalizing commonsense investor protections that the Commission has proposed as part of its implementation of the 2012 Jumpstart Our Business Startups (JOBS) Act, which relaxed a long-standing prohibition on advertising and general solicitation by issuers of unregistered securities.  The SEC has proposed disclosure rules for such issuers, such as requiring them to file a notification form with the SEC before engaging in advertising or general solicitation to sell their unregistered stock and to file their advertising materials with the Commission – reasonable measures that would help the Commission detect possible fraud and expose potentially misleading statements made by issuers.

Put simply, H.R. 2357 would undo regulations put in place under Dodd-Frank that protect the American people from another financial crisis.  In the Statement of Administration Policy, the President's senior advisors stated that they would recommend he veto this bill.

The Rule makes in order 2 amendments, debatable for 10 minutes, equally divided between the offeror and an opponent.  The amendments are:

DeSantis Amendment. Requires companies to publically disclose if they engage in business within Iran or with the Government of Iran.
Hinojosa Amendment.  Limits unaccredited investor purchasers to 35 purchasers, and limits the amount they may invest to $5,000. Issuers of exempted securities must provide updated disclosure documents to purchasers.

Bill Text for H.R. 2357:
PDF Version

Background for H.R. 2357:
House Report (HTML Version)
House Report (PDF Version)

Postponed Suspension (1 bill)

1. H.Res. 660 – Expressing the sense of the House of Representatives to support the territorial integrity of Georgia (Rep. Poe – Foreign Affairs)

TOMORROW’S OUTLOOK
The GOP Leadership has announced the following schedule for Friday, September 9: The House will meet at 9:00 a.m. for legislative business.  The House is expected to consider H.R. 5424– Investment Advisers Modernization Act of 2016 (Rep. Hurt – Financial Services).  The House is also expected to consider S. 2040 – Justice Against Sponsors of Terrorism Act (Sen. Cornyn – Judiciary) – under suspension of the Rules.

The Daily Quote

“Senate leaders have opened discussions with the White House on a stopgap spending measure that would avoid a government shutdown next month and give lawmakers until Dec. 9 to craft a final fiscal 2017 package.‘We're going to work toward the Dec. 9 date,’ [Senate] Majority Leader Mitch McConnell, R-Ky., told reporters Wednesday… But it won't be an easy sell. Some House conservatives want to avoid another Christmastime mammoth spending package… Within an hour of McConnell's announcement, the leader of the largest bloc of House conservatives heaped scorn on the Dec. 9 plan. ‘I think Leader McConnell is going [in] the wrong direction,’ Rep. Bill Flores, R-Texas, chairman of the Republican Study Committee, told reporters. ‘Conservatives in the House would have an issue with that.’  Taming that opposition will be the job of House Speaker Paul D. Ryan, R-Wis., who must juggle competing political pressures to win passage of a stopgap bill, known as a continuing resolution. He plans to hold a closed-door meeting with his conference Friday morning to air political differences.”       -    CQ, 9/8/2016