May 10, 2023

Scott, Colleagues Warn the SEC’s Regulatory Agenda Will Squeeze Small Businesses

Washington, D.C. – Senator Tim Scott (R-S.C.), Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, is leading a group of Banking Committee Republicans to demand information from the Securities and Exchange Commission (SEC) about the effects of the agency’s aggressive rulemaking on small and emerging businesses. In a letter to SEC Chair Gary Gensler, the Senators rebuked the SEC for pursuing an expansive rulemaking agenda that fails to take into account how these regulations will undermine the strength of U.S. capital markets and make it more challenging to start and grow a business in America.

The letter was signed by Ranking Member Tim Scott (R-S.C.) and Senators Mike Crapo (R-Idaho), Mike Rounds (R-S.D.), Thom Tillis (R-N.C.), John Kennedy (R-La.), Bill Hagerty (R-Tenn.), Cynthia Lummis (R-Wyo.), Kevin Cramer (R-N.D.), and Steve Daines (R-Mont.).

“We are deeply concerned that the SEC, under your leadership, has put America’s capital markets framework into jeopardy by failing to properly scale, or tailor, your rules to ensure they do not disproportionately impact small businesses,” the Senators wrote.

“Unfortunately, the aggressive and sprawling rule-making agenda put forth by the SEC under your leadership seeks to further burden these businesses, rather than making it easier for them to raise and deploy growth-driving capital. The SEC currently has over fifty items on its regulatory agenda, many of which will drastically change the operation, structure, and efficiency of U.S. capital markets. The unprecedented volume, complexity, and interconnectedness of the SEC’s rules will inevitably result in severe market disruptions that will harm our capital markets and the investors they serve, particularly small and emerging U.S. businesses and market participants,” the Senators continued.

The Senators requested that the agency provide information about the effects of SEC rules and proposed rules on small and emerging businesses by June 7, 2023.

Read the full letter here.