Under current law, certain securities issuers with more than $10 million in assets whose equity securities are held either by 2,000 or more accredited investors or by 500 people who are not accredited investors must register with and periodically report to the Securities and Exchange Commission (SEC). If the number of investors falls below 300, the issuer is exempt from certain reporting requirements and could terminate its registration. H.R. 5051 would direct the SEC to change the registration threshold for all securities to 2,000 people, adjust the asset size requirement at five-year intervals to account for inflation, and raise the exemption and termination thresholds for all equity securities to 1,200 investors.
Using information from the SEC on the costs of similar activities, CBO estimates that implementing H.R. 5051 would cost less than $500,000 for the agency to amend its rules. However, the SEC is authorized to collect fees sufficient to offset its annual appropriation; therefore, CBO estimates that the net effect on discretionary spending would be negligible, assuming appropriation actions consistent with that authority.
Enacting H.R. 5051 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting H.R. 5051 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2029.
H.R. 5051 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.