Memo from House Financial Services Committee Hints at a Proposed Sweeping

Changes to The Financial Choice Act

Details in a February 2017 memo written by the chair of the U.S. House of
Representatives Financial Services Committee illustrate the Trump administrations
interest in sweeping changes and the easing of regulations that govern banks,
securities trading, capital investment, corporate reporting, taxpayer bailouts and
consumer protection.

Even though the memo was not intended for public dissemination, and even though
some of the suggested changes to the proposed 2016 Financial Choice Act and its
more recent 2017 version may never be enacted into law, West Palm Beach Attorney
Laura Anthony, founding partner of Legal and Compliance, LLC, says the new thinking
highlighted in the memo represents what could be an avalanche of positive change for
small businesses and capital formation.

As it lays out a 2017 framework for what it calls Financial Choice Act 2.0, the memo
recommends changes to the original House-passed U.S. Financial Choice Act, which if
passed, would dismantle much of the Securities and Exchange Commissions (SEC)
power and overturn many key provisions in the Dodd-Frank Act, a sweeping law that
was adopted in wake of the 2008 recession and banking scandals, Anthony writes in the
Securities Law Blog. (The bill passed the House 233-186 on June 8, and now awaits
Senate action).

Key among the original Financial Choice Acts provisions were repeal of requirements
for companies to report executive compensation, repeal of the federal governments
authority to classify financial institutions as too big to fail and cessation of the federal
governments ability to bail out institutions financially, or to investigate risky financial
institutions and enforce bail-out provisions.

Anthony said the updated 2017 recommendations outlined in the memo have specific
implications for federal securities law and capital formation, her areas of legal expertise.
Among them:

A threshold increase from $250 million to $500 million for public floats that would
be subject to the reporting provisions of the Sarbanes-Oxley Act (SOX). Smaller
reporting companies also would be freed of some SOX reporting requirements.
Higher registration thresholds, eased registration requirements and an inflation
index for smaller companies involved in securities and investments.
Greater flexibility around test-the-waters communications during initial public
offerings, and expanded ability to file IPO registration statements on a
confidential basis to all companies, not just to emerging growth companies.
General rollbacks of provisions governing self-regulation, allowable offering
amounts, the use of universal proxies in contested elections of directors,
 shareholder ability to submit proposals for vote at annual meetings, and a two-
year delay in the repeal of the Chevron doctrine, which requires courts to defer to
an agencys interpretation of statues and laws.

Compared to the past 30 years, recent years have seen the most dramatic changes in
capital formation regulations and technological development, Anthony writes in the
Securities Law Blog. My clients are universally enthusiastic about the state of the
economy and business prospects as a whole. The consistent mantra of decreased
regulation is universally welcomed with a sense of relief.

For more information, or to find out more about the suggested revisions to the U.S.
Financial Choice Act, contact attorney Laura Anthony, founding partner of Legal &
Compliance, LLC, a national corporate and securities law firm, at 1-800-341-2684 or visit
www.LegalandCompliance.com and www.LawCast.com.