H.R.3673 - Small Business Investor Capital Access Act (119th Congress)
Summary
H.R.3673, the Small Business Investor Capital Access Act, proposes amending the Investment Advisers Act of 1940. The amendment aims to adjust the exemption threshold for certain investment advisers of private funds based on inflation. This adjustment would be calculated using the Consumer Price Index for All Urban Consumers (CPI-U) published by the Bureau of Labor Statistics.
Expected Effects
The bill's passage would mean that more investment advisors could be exempt from registration requirements. This could reduce regulatory burdens on smaller advisors. It would also require the SEC to make annual inflation adjustments to the exemption threshold.
Potential Benefits
- Reduced regulatory burden for smaller investment advisors, potentially freeing up capital for investment.
- Increased investment in small businesses due to easier access to capital.
- Simplification of compliance for investment advisors managing smaller funds.
- Regular inflation adjustments prevent the exemption threshold from becoming outdated.
- May encourage the formation of new private funds focused on small business investment.
Most Benefited Areas:
Potential Disadvantages
- Reduced oversight of investment advisors could increase the risk of fraud or mismanagement.
- Inflation adjustments may not accurately reflect the actual costs faced by investment advisors.
- Larger investment advisors may exploit the exemption to avoid regulatory scrutiny.
- Potential for increased risk to investors due to decreased regulatory oversight.
- The benefits may disproportionately favor investment advisors over small businesses or investors.
Constitutional Alignment
The bill falls under Congress's power to regulate commerce, as outlined in Article I, Section 8, Clause 3 (the Commerce Clause). The regulation of investment advisors and private funds has been historically justified under this clause. The bill does not appear to infringe upon any specific constitutional rights or protections.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).