Many provisions enjoy bipartisan support at a time when Britain’s decision to exit the Euro-
pean Union focuses attention on global financial regulatory reform. ACG anticipates the bill
is likely to be marked up before the election, and it could be a road map for post-election
reform. In addition, some of its provisions could be enacted in year-end omnibus legislation.
Another reform bill, the Investment Advisers Modernization Act, is being considered by
the House Financial Services Committee. The bipartisan legislation, led by Reps. Robert
Hurt, R-Va., and Juan Vargas, D-Calif., would tailor requirements of the Investment Advisers
Act of 1940 to reflect the private equity investor model, while also maintaining SEC oversight
and investor protections. In June, the committee approved H.R. 5424 by a vote of 47 to 12,
and the bill is expected to move for consideration on the House floor in the early Fall.
The legislative action follows efforts by ACG and its Private Equity Regulatory Task
Force, known as PERT, to support the bill during its annual fly-in. In mid-May, ACG member Joshua Cherry-Seto, CFO of Blue Wolf Capital, testified before the House Financial
Services Subcommittee on Capital Markets and Government Sponsored Enterprises in
support of the bill.
Also in June, the long-awaited blueprint on comprehensive tax reform was released by
the House Republican Task Force on Tax Reform, led by House Speaker Paul Ryan, R-Wisc.,
and Ways and Means Committee Chairman Kevin Brady, R-Texas. It proposes a 20 percent
statutory corporate tax rate, a move toward a cash-flow consumption tax through immediate
expensing and a limit on business interest deductions, a limit that ACG has opposed.
ACG contends limiting interest deductibility would hinder the ability of small and mid-
size businesses to finance new investment, expansion and innovation, as well as their abil-
ity to create new jobs. In recent years, both Republicans and Democrats have focused on
eliminating this deduction as a way of raising revenue.
The blueprint is only the beginning and not the end. Ways and Means Committee staff
have indicated they are inviting comments and want to work with stakeholders to fill in the
gaps. Currently, there is no accompanying legislative text to the blueprint and therefore no
conventional revenue estimate, though proponents claim it is intended to be revenue neutral
in the current economy.
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