Disclosure Modernization and Simplification Act of 2014

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4569) to require the Securities and Exchange Commission to make certain improvements to form 10-K and regulation S-K, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members be given 5 legislative days within which to revise and extend their remarks and include extraneous materials for the Record on H.R. 4569, as amended, that is currently under consideration

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise now in support of H.R. 4569, which is the Disclosure Modernization and Simplification Act of 2014. Having access to the U.S. capital markets and the broad investor base that comes with it is vital--literally vital--for U.S. companies to be able to grow their businesses and create jobs in this country.

Over time, as our securities laws have continued to grow and evolve, the number of new SEC rules and regulations that have been weighing down on public companies continue now to multiply, and it is becoming more and more difficult and costly for small businesses to succeed and eventually go public.

Many of the disclosure rules that have been added over time are both duplicative and are no longer needed due to many technological advancements that we are all familiar with. And yet the SEC has taken little action to review these unnecessary and outdated regulations and to make appropriate changes to help U.S. companies and also investors.

So we have H.R. 4569 before us, and it seeks to do what? It removes some of the outdated and unnecessary red tape and allows for the small companies and investors to benefit from a more streamlined and efficient public disclosure regime.

Specifically, the legislation would direct the SEC to simplify the public company disclosure regime for issuers and investors by permitting the issuers to submit a summary page of annual reports on Form 10-Ks with cross references to the contents of the report. It is that simple.

Because the typical 10-K filed by issuers is hundreds of pages long and

written in legalese, investors do find it difficult to locate and to digest the truly important information about the company in the report. So permitting issuers to submit a summary page would enable companies to concisely disclose pertinent information to investors without exposing them to liability.

This summary page would also enable investors to more easily access the most relevant information about that company.

This legislation would also direct the SEC to revise Regulation S-K-- ``Reg S-K,'' it is called--to better scale disclosure rules for emerging growth companies and smaller issuers, and to eliminate other duplicative, outdated, or unnecessary Reg S-K disclosure rules for all issuers.

In testimony before the Capital Markets Subcommittee, one witness stated: ``The burdens imposed by existing regulation, primarily Reg S-K and Reg S-X, effectively deny small companies access to the public market and make investors less willing to invest.''

He added: ``This bill, H.R. 4569, is very constructive, and the Commission is likely to be receptive to it. It might well launch a process that would substantially reduce unneeded impediments to smaller firms being able to access the public capital markets.''

Additionally, another commenter testified:

Over the course of time, proxies have become voluminous,

some required disclosures have becomes obsolete, and the

delivery of information has changed, though the legal

mandated forms of disclosure have not.

This situation has commonly been referred to as

``disclosure overload'' and it is apparent that investors are

not being given information in a decision-useful manner and,

in some cases, they are simply overwhelmed with non-relevant

information.

Even SEC Chair Mary Jo White has, on several occasions,

stated that a review of our current disclosure system is a

top priority for the Commission this year. So this bill would

help augment the SEC's effort by requiring the Commission to,

first, eliminate wholly unnecessary or outdated disclosure

requirements and to allow issuers to include a summary of

material in the form 10-K.

So this legislation builds on section 108 of the Jumpstart Our Business Startups bill--you remember that, the JOBS Act--which directed the SEC to study Reg S-K in order to simplify and modernize disclosure rules. The SEC completed the study in December of 2013. Unfortunately, the study proposed few substantive reform measures. Instead, it recommended further study of Reg S-K disclosure rules.

Let me conclude with this. Given our continued economic difficulties, I believe we need to stop studying and start taking action. Simplifying and streamlining disclosure requirements will enable companies to divert fewer resources to compliance, freeing up additional capital to create American jobs.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I thank the gentlelady for her assistance in this matter.

Also, you made reference to Mrs. Maloney from New York for her work as well. She is not on the floor right now, but I certainly do appreciate her efforts with the legislation and in full committee and in subcommittee as well in order to move forward on this piece of legislation before the House, H.R. 4569.

And to your comment about perhaps I should have taken the substance of the bill to heart, I did streamline the 10 pages down to four pages to make it not duplicative, unnecessary, and outdated information.

Mr. Speaker, I yield such time as she may consume to the gentlewoman from New York (Mrs. Maloney).

I thank the gentlewoman for her efforts.

Mr. Speaker, at this point, I yield 2 minutes to the gentleman from Indiana (Mr. Stutzman).

I appreciate the gentleman's coming to the floor. More importantly, I appreciate the gentleman's efforts and hard work on this legislation in committee. Thank you very much.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I rise today in strong support of the Disclosure Modernization and Simplification Act of 2014.

For far too long, our economy has remained weak, and small businesses and wage earners have suffered greatly. Part of the reason they have suffered is from too many regulations and from an increase in red tape from Federal Government agencies, which has hindered growth and kept businesses from expanding. They also present big challenges for startup companies that are looking to gain solid footing in this shaky economy.

If we are going to move this country in the right direction, we need to make it easier and not harder for Americans to do business. The least we can do in Washington is to make sure Federal regulators do not force business managers to report the same information over and over. That is what this act is all about.

This legislation, along with others we will consider today, will help remove the Federal Government from the backs of small business owners and make it easier for all Americans to succeed.

It will revise regulations to include startup companies, to eliminate redundant and duplicative provisions, and to discourage the disclosure of immaterial information, among other simplifications. Now is the time to remove these roadblocks on the pathway to success.

The American people are looking for us to ease some of these painful economic burdens, and today, we have an opportunity to support legislation that will have a positive impact on our economy, that which limits the challenges on small business owners and job creators.

Let's work together in this Chamber and pass this series of bills in a bipartisan fashion. Let's show our constituents that we are serious about recharging our economic engine by pursuing commonsense regulatory reforms.

I would like to thank Chairman Hensarling, Representative Garrett, Representative Hurt, and the rest of the members of the Financial Services Committee, who worked hard on this issue. I urge my colleagues in the House to support this legislation.

Mr. Speaker, I yield myself such time as I may consume.

I rise in strong support of Mr. Garrett's bill, H.R. 4569, which was favorably reported from the House Financial Services Committee, and championed by my friend from New York (Mrs. Maloney).

I would like to associate myself with the long and extended explanation by Mr. Garrett of New Jersey, and just to say, Mr. Speaker, that, in short, this bill will make disclosures that public companies make more streamlined, manageable, and user friendly.

I really appreciate the participation of my good friend, Representative Maloney, who really worked hard to make sure that this legislation was balanced and it included language to emphasize that we needed to reduce burdens on companies, but we need to preserve investment protection.

So, given the changes that Mrs. Maloney made with the Maloney amendment, I strongly support the legislation, would urge all my colleagues to support it, and I yield back the balance of my time.

Mr. Speaker, I want to thank my colleague for his hard work on this bill. I did want to come to the floor and support it because it is one of the areas where we did work together in a positive way.