BIO Applauds House Passage Of Capital Markets Improvement Act

WASHINGTON--(BUSINESS WIRE)--Today, the Biotechnology Innovation Organization (BIO) applauds the House of Representatives for passing H.R. 1675, the Capital Markets Improvement Act. This important bill would support the public capital formation ecosystem necessary to fund groundbreaking biotech research.

“Streamlining disclosure requirements will slow the diversion of capital from science to compliance – enhancing capital formation and spurring scientific advancement at biotech small businesses across the country.”

H.R. 1675 combines several bills that passed the House Financial Services Committee on a broad, bipartisan basis. BIO supports these reforms, which would reduce regulatory burdens on growing companies and increase the capital formation potential of the public market:

• The Small Company Disclosure Simplification Act. This bill would exempt emerging growth companies (EGCs) and certain low-revenue issuers from the costly eXtensible Business Reporting Language (XBRL) reporting requirement while requiring the SEC to study and improve the XBRL compliance mechanism. BIO believes that growing companies should not have to bear the costs of XBRL until it has been demonstrated to be cost-effective and useful to investors.
• The Streamlining Excessive and Costly Regulations Review Act. This bill would require the SEC to regularly review major regulations it has issued and determine whether its rules have become unnecessary, outmoded, ineffective, insufficient, or excessively burdensome.
• The Encouraging Employee Ownership Act. This bill would reduce the disclosure burden on firms that offer stock options to their employees, a valuable compensation practice for growing biotechs.

The following statement may be attributed to Cartier Esham, BIO’s Executive Vice President of Emerging Companies:

“BIO supports strong investor protections and appropriate reporting standards. Innovators in the biotech industry strive to keep investors informed of scientific progress and clinical trial advancement – the true indicators of a biotech company’s health. However, costly regulatory burdens like XBRL do not provide useful insights to investors and can slow the development process, diverting capital from the lab and increasing the time that it takes to deliver life-saving medicines to patients.

“The Capital Markets Improvement Act represents a step away from one-size-fits-all compliance requirements. By requiring the SEC to study the effects of XBRL compliance on the market while giving emerging innovators a break from this costly regulatory burden, the bill provides important regulatory relief for small issuers.

“Streamlining disclosure requirements will slow the diversion of capital from science to compliance – enhancing capital formation and spurring scientific advancement at biotech small businesses across the country.”

BIO testified in support of the Small Company Disclosure Simplification Act and the Encouraging Employee Ownership Act at a House Capital Markets Subcommittee hearing in April 2015.

About BIO

BIO is the world’s largest trade association representing biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world’s largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world. BIOtechNOW is BIO’s blog chronicling “innovations transforming our world” and the BIO Newsletter is the organization’s bi-weekly email newsletter. Subscribe to the BIO Newsletter.