The House Financial Services Committee will hold a hearing next Wednesday, March 16, to review draft legislation to exempt advisers to private equity funds from the Dodd-Frank Act, according to a House staff source, Buyouts is reporting.
The bill would seek to restore the private equity exemption language that passed the Senate but was dropped in the Dodd-Frank conference committee, according to the source. Once the March 16 hearing concludes, the committee would then mark up the bill and proceed to the full House for consideration, according to the source.
Several mid-market firms have launched a last-ditch campaign in recent months urging Congress not to impose a new requirement that they must register with the U.S. Securities and Exchange Commission. Buyouts reported in January the executives at some of the firms involved have scored at least one face-to-face meeting with Spencer Bachus, the Alabama Republican who now chairs the FSC.
Executives at the firms, including Olympus Partners, Atlas Holdings LLC and Brockway Moran & Partners, argue that registration would be too expensive for smaller shops with fewer resources than large global firms, distracting them from making investments. Welsh Carson Anderson & Stowe, for example, expects to spend about $600,000 this year in order to comply with the requirement, co-founder Russell Carson said at a recent industry conference.
It is unclear whether the prospective change would exempt all private equity firms from registration, or would affect only mid-market sponsors. Officials at the Financial Services Committee were not immediately available for comment.
The effort comes as regulators begin the task of writing rules for the Dodd-Frank Wall Street Reform and Consumer Protection Act, which President Barack Obama signed into law in July. The portion in question calls for firms with $150 million of assets or more under management to register as advisers with the SEC, which would entail filing annual paperwork, developing compliance policies, keeping tighter records and undergoing examinations, among other obligations.
Bernard Vaughan is a Senior Editor at Buyouts Magazine. Follow his tweets @BVaughanReuters. Follow Buyouts tweets @Buyouts. For information on how to subscribe, contact Greg Winterton at [email protected]