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Utah Life Sciences News & Events

SEC adopts McAdams and Hollingsworth proposal to cut red tape on promising start-ups

March 18, 2020

Courtesy of mcadams.house.gov

Washington, D.C.—Legislation by Congressman Ben McAdams and Congressman Trey Hollingsworth (R-IN) giving commonsense regulatory relief for America’s growing companies was essentially adopted by the Securities and Exchange Commission (SEC) in a rule-making action. McAdams introduced the Fostering Innovation Act in 2019 as a narrow fix that allows small emerging growth companies to keep capital working to fund business needs, rather than expensive regulatory filings.

“This timely action by the SEC comes at a critical time for many growing companies, including those in the bioscience sector, to keep vital capital working in research and development, rather than costly regulatory requirements. America has long been a leader in scientific and medical innovation, and this move by the SEC helps ensure that will continue,” said McAdams.

“Last Congress we passed a bipartisan bill to ensure smaller companies can invest in cures, not excessive compliance; I’m happy to see the SEC is carrying this forward and enabling American firms to continue leading the world in groundbreaking research,” said Rep. Hollingsworth.

The SEC adopted amendments to the “accelerated filer and “large accelerated filer” definitions. This action tailors regulatory issues for these start-ups that had no revenues or low annual revenues in the most recent fiscal year. The amendments adopted by the SEC do not change key protections from the Sarbanes-Oxley Act of 2002.

The adopted SEC amendments take effect 30 days after publication in the Federal Register.