Senate Banking Ranking Member Toomey Releases JOBS Act 4.0 Discussion Draft

On the 10th anniversary of the “Jumpstart our Business Startups Act” (JOBS Act), Senate Banking Committee Ranking Member Pat Toomey (R-PA) released a discussion draft that includes new proposals focused on small business formation, encouraging companies to go public, and expanding retail investor access to private markets. The JOBS Act 4.0 would, among other things, (1) expand the definition of “qualifying investments” by venture capital funds, (2) double the number of limited partners allowed in certain venture capital funds, (3) change public company reporting requirements from quarterly to semi-annually, (4) allow “gig economy” companies provide equity compensation to their contractors, and (5) broaden the definition of accredited investors to those who pass an SEC-designed test.  In an opening statement at a Banking Committee hearing on April 8, Ranking Member Toomey noted the JOBS Act 4.0 would “encourage companies to be publicly-traded, particularly during earlier growth stages, improve the market for private capital by appropriately tailoring regulations for small businesses, enhance retail investor access to investment opportunities, and improve regulatory oversight.” He added that it is important to “expand retail investor access to these non-public investments so they can diversify their portfolios and potentially receive the higher returns available to the wealthy.” His office requests feedback on the discussion draft from interested stakeholders over the next 60 days.