Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, let me at the outset thank my colleague from New York (Mr. Meeks) without whom this legislation would not be possible. As he has mentioned, while we are on opposite sides…
Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, let me at the outset thank my colleague from New York (Mr. Meeks) without whom this legislation would not be possible. As he has mentioned, while we are on opposite sides of the aisle, we share the common goal of ensuring that the U.S. remain the envy of the world when it comes not just to capital markets but also the place where people can come, investors can come, entrepreneurs can exist and find capital and make this country even better and stronger.
Of course, we share the common purpose of representing the greatest city in the world, New York, which has always been and shall continue to be the financial capital of the world. I would also like to thank the chairman of the committee, Mr. Frank, and especially the ranking member, Mr. Bachus, for bringing this bill to the floor, again, without whom this would not be possible.
Over the past year or more there has been a new and rightly placed focus on the competitiveness of the United States capital markets. As emerging international markets continue to grow, the natural and historical attraction to the U.S. capital markets has given way to the considerations of a broader scale. In short, the U.S. is no longer the only game in town.
Over the past several years, as my good friend Mr. Meeks has indicated, several reports have been published that argue the regulatory and legal environment in the U.S. serve as negative considerations when market participants choose where to raise capital or headquarter a global business. With new markets popping up across the globe, investors and businesses now have more options, and increasingly we are seeing them choose alternatives to the U.S., such as Hong Kong, Singapore, and London.
We have seen an increasing number of U.S. companies, in particular small companies, raise capital on foreign exchanges, in particular, London's Alternative Investment Market, or, as known commonly, AIM. Clearly, the United States remains the global financial leader. Overall, I believe we can be optimistic about the future growth and success of the American capital markets. However, in a constantly evolving and ever-innovative global marketplace, we cannot take our leadership for granted, nor ignore indicators that the U.S. competitive edge is diminishing. As lawmakers, we have a critical responsibility to ensure the U.S. remains at the forefront of the financial markets.
Strong capital markets are not a success realized by Wall Street and investment bankers exclusively. Strong markets mean jobs, economic growth and retirement security for people across the United States. We cannot control the evolution of overseas markets or their ability to compete in a global marketplace, nor should we want to. What we can control, however, is our ability to respond and to adapt to changing circumstances with innovation and flexibility that will allow our markets and market-makers to maintain their competitive edge.
This bill, the Small Cap Competitive Listing Act, is an important and reasonable step toward achieving that goal. In order to compete in an increasingly global and highly competitive marketplace, exchanges both domestic and international have developed additional listing tiers, with lower listing standards to expand opportunities for
smaller companies. Particularly for small cap companies, an opportunity to list on a developmental tier is an important component to their ability to raise the capital necessary to grow their business and to continue to innovate.
Mr. Speaker, in 1996, Congress passed the National Securities Market Improvement Act in an effort to streamline the regulatory process and eliminate duplication. Common sense. This act included an important provision that granted preemption from State security regulation to the national exchanges: the New York Stock Exchange, NASDAQ, and the American Stock Exchange. Because these listings were national in scope on the major U.S. exchanges, Congress deferred regulation to the Securities and Exchange Commission. However, as the markets have evolved, that legislation has created a legislative barrier to the establishment of developmental tiers on national exchanges.
Because developmental tiers have less stringent listing standards, securities offered on those exchanges should in fact be subject to State regulatory oversight in addition to the SEC oversight. The legislation provides the national exchanges a legislative pathway that currently exists for regional domestic exchanges and foreign exchanges to offer a marketplace for small cap companies. By allowing the national exchange to establish this new tier, it will grant small cap companies a new alternative to London's AIM market and to other marketplaces that may be less regulated and less transparent.
This legislation represents sound policy. It puts all of our domestic exchanges on equal footing and removes a roadblock to progress. In addition, the bill represents an important approach to addressing American competitiveness. It grants the flexibility to develop new offerings without creating a regulatory race to the bottom. These new tiers would be subject to State security regulations, and any proposed new listing will be subject to oversight and approval from the SEC. Additionally, investor protections are upheld. As public companies, small cap companies seeking to list on a developmental tier will be required to fully comply with U.S. securities laws.
Let me just say in closing, Mr. Speaker, I want to thank Mr. Meeks. We here in Congress, regardless of our party affiliation or where we are from, know that this country is the engine of the world, and we want to keep it such. We understand that financial markets, in particular the securities industry, is a vital component of our national economy.
And it is not just about Wall Street. As mentioned, many of us, whether you are from Queens, Brooklyn or Staten Island, many of our constituents benefit from a vibrant financial service industry. Much of that tax revenue disproportionately in New York City goes to fund schools and parks and roads. This is just a small way in which we can maintain that competitive edge, give entrepreneurs and small companies the opportunity to access our capital markets, put us on equal footing to compete with London's AIM and other emerging market exchanges across the world, and understand that the American people, the American businessman and woman, can compete with anyone if given the tools and the barriers are diminished.
Mr. Speaker, I have no speakers. Mr. Meeks, thank you very much. As well, I would like to add my thanks to his staff and that of Mr. Frank, Mr. Bachus, and on my staff, Ryan McKee, and urge my colleagues to adopt the underlying legislation.
With that, I yield back the balance of my time.