Expanding American Entrepreneurship Act
Summary
The "Expanding American Entrepreneurship Act" (S. 2906) proposes amendments to Section 3(c)(1) of the Investment Company Act of 1940. The bill aims to increase the threshold for the number of persons allowed in certain investment entities from 250 to 500 and raises the asset threshold from $10 million to $50 million. This adjustment seeks to broaden the scope of entities that are not considered investment companies under the Act.
Expected Effects
The likely effect of this bill is to allow smaller investment funds to operate with fewer regulatory burdens. This could lead to increased investment in startups and small businesses. It may also reduce compliance costs for affected entities.
Potential Benefits
- Increased access to capital for startups and small businesses.
- Reduced regulatory burden for smaller investment funds.
- Potential for increased innovation and job creation.
- Greater flexibility for investment strategies.
- Could foster a more competitive investment landscape.
Most Benefited Areas:
Potential Disadvantages
- Potential for increased risk to investors due to reduced regulatory oversight.
- May lead to the formation of less transparent investment vehicles.
- Could concentrate investment in certain sectors, potentially creating imbalances.
- Possible erosion of investor protection measures.
- May disproportionately benefit wealthier investors who have access to these investment opportunities.
Constitutional Alignment
The bill appears to align with the spirit of promoting the general welfare, as mentioned in the Preamble of the US Constitution, by aiming to foster entrepreneurship and economic growth. Article I, Section 8 grants Congress the power to regulate commerce, which could be interpreted to include the regulation of investment companies. However, the specific amendments do not directly implicate any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).