NC West Virginia News

WASHINGTON – Congressman Alex X. Mooney has introduced the Protecting Private Job Creators Act, a bill aimed at safeguarding the fixed-income market from burdensome Securities and Exchange Commission (SEC) disclosure requirements. The legislation seeks to exempt fixed-income securities, such as bonds, from a recent misinterpretation of an SEC regulation.

In a statement, Congressman Mooney highlighted the need for clarity in the fixed-income market, stating, "The SEC's application of Rule 15c2-11 to fixed-income securities reverses decades of regulatory practice which threw the market into disarray. My legislation brings needed clarity to the fixed-income market."

Senator Bill Hagerty (R-TN) has also introduced this legislation in the Senate, emphasizing the importance of preventing over-regulation of fixed-income markets. Senator Hagerty said, "We cannot allow the SEC to suffocate our capital markets with onerous regulations. The Protecting Private Job Creators Act prevents the SEC from over-regulating fixed-income markets, preserving companies' abilities to raise capital for investment, job creation, and economic growth."

The bill has gained support from several Republicans on the Financial Services Committee, including French Hill (R-AR), Scott Fitzgerald (R-WI), Dan Meuser (R-PA), Barry Loudermilk (R-GA), Roger Williams (R-TX), and Pete Sessions (R-TX).

The legislation addresses a recent interpretation of Rule 15c2-11 by the SEC, which was originally adopted in 1971 to protect retail investors in the over-the-counter (OTC) penny stock market. The rule requires broker-dealers to ensure that financial information is current for each private company for which they publicize stock prices. However, in 2021, the SEC expanded the rule to include a public disclosure requirement for fixed-income securities, potentially exposing proprietary information and imposing compliance costs on private companies.

While the SEC has made some adjustments to its interpretation, exempting Rule 144A fixed-income securities, the Protecting Private Job Creators Act seeks to provide permanent legislative relief by exempting all fixed-income securities from Rule 15c2-11 compliance.

The legislation has garnered support from various industry organizations, including SIFMA, National Association of Manufacturers (NAM), American Securities Association (ASA), Investment Adviser Association (IAA), CRE Finance Council, U.S. Chamber of Commerce, Loan Syndications and Trading Association (LSTA), Structured Finance Association (SFA), Bond Dealers of America (BDA), and Managed Funds Association (MFA).

ASA President & CEO Chris Iacovella expressed support for the legislation, stating, "ASA supports Congressman Alex Mooney's legislation to grant broker-dealers permanent relief from Rule 15c2-11 for fixed-income securities. While the SEC issued an order granting exemptive relief, legislation granting permanent relief is necessary to provide certainty to participants in America's capital markets."

Neil Simon, Vice President of Government Relations at the Investment Adviser Association (IAA), stated, "The Investment Adviser Association supports this legislative solution making clear that Rule 15c2-11, which was intended to address concerns in the equities market, may not be read to apply to any fixed income securities."

The U.S. Chamber of Commerce also applauded the bill, with Kristen Malinconico, Director of the U.S. Chamber of Commerce Center for Capital Markets Competitiveness, stating, "The U.S. Chamber of Commerce applauds Rep. Mooney for sponsoring legislation to stop the SEC's new interpretation of Rule 15c2-11 from affecting fixed-income markets and maintaining their liquidity and transparency for businesses and investors alike."

Michael Bright, CEO of the Structured Finance Association (SFA), emphasized the importance of congressional relief, stating, "We very much appreciate Representatives Mooney, Hill, Fitzgerald, Meuser, Loudermilk, Williams, and Sessions for their focus on this issue, which is of critical importance to the fixed-income markets. Congressional relief can help give the markets certainty that helps liquidity and capital formation for consumers and businesses across the country over the long run."

The Bond Dealers of America (BDA) also voiced its support for the legislation, with CEO Mike Nicholas stating, "The BDA applauds Rep. Mooney's introduction of legislation that would exempt quotations for all fixed-income securities from SEC Rule 15c2-11. We urge Congress to take swift action in passing this legislation correcting the SEC's action applying the Rule to bonds, which is contrary to current law."

With bipartisan support and backing from industry organizations, Congressman Mooney's Protecting Private Job Creators Act aims to provide clarity and relief for the fixed-income market, ensuring that companies can continue to raise capital for investment, job creation, and economic growth.