As I blogged last month, I've been thinking a lot (by which I mean, writing frantically) about the political economy of securities regulation. One point I'll make in my hopefully-upcoming article is this: securities deregulation doesn't often occur. We can cite 2 chief instances: the PSLRA and the JOBS Act. Both were passed with a divided Congress and executive branch. And both had the backing of Silicon Valley.
Last year we saw Republicans employ a scorched earth strategy, ramming repeal of a Dodd-Frank provision in must-pass Cromnibus legislation. With their newfound majority status, those rascally Republicans are at it again, as Christine blogged last week. What's interesting is that the new legislation includes not only paring back Reg S-K, but also including a grace period for change of status for emerging growth companies and implying disclosure requirements for them. Many technology startups take advantage of at least some EGC benefits when going public, so these particular anti-regulatory measures should prove popular in tech circles.
It may be that these bills won't pass, but based on my current research, I'll hazard that financial institutions are making a shrewd move by aligning themselves with traditionally Democratic Silicon Valley. Uber is a lot more sympathetic to the masses than UBS.
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