ASA: Sarbanes-Oxley Worst Policymaker Response for Small Businesses, IPO Market

WASHINGTON – Ahead of a House Financial Services Committee hearing reassessing Sarbanes-Oxley (SOX) and the cost of accessing today's capital markets, the American Securities Association (ASA) sent a letter outlining the severe negative impact SOX had on the initial public offering (IPO) market.

"Perhaps no other law or regulatory action in history has done more to disincentivize IPOs and weaken the competitiveness of the U.S. capital markets than Sarbanes-Oxley," said ASA President and CEO Chris Iacovella. "After nearly twenty-five years since Congress' hurried response to the Enron and WorldCom failures, America's small businesses and our capital markets continue to be hit by the ripple effects of this costly law. ASA looks forward to working with Congress to build upon the success of the JOBS Act and further address the costs of Sarbanes-Oxley for small public companies."

In its letter to the Committee, ASA outlined its support for the following legislation and policies:

• Legislation advanced by this Committee that would migrate the responsibilities of the PCAOB to the SEC and bring greater transparency and accountability towards regulation of the audit industry. This is all the more important after the PCAOB completely failed to protect American investors from fraudulent Chinese companies.

• Helping Startups Continue to Grow Act which would extend the JOBS Act IPO “on-ramp” and legislation that would amend the large, accelerated filer and smaller reporting company (SRC) definition to exempt certain businesses from Section 404 mandates.

• We also believe this Committee should revisit the obstruction of justice charges set forth in the act to make certain they cannot be used for unintended and political purposes by overzealous bureaucrats.

  
  

###

The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.