Investment Advisers Modernization Act of 2016

Floor Speech

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Ms. SINEMA. Thank you to Chairman Hensarling, Ranking Member Waters, and Congressmen Hurt, Foster, Vargas, and Stivers for all of their work on this bipartisan legislation to streamline the antiquated regulatory framework for private equity fund advisers while maintaining appropriate industry oversight and investor protections.

Private equity investors across the country provide billions of dollars each year to Main Street businesses, and over 11 million Americans work for private equity-backed businesses. Last year alone, private equity firms invested an estimated $18 billion in more than 60 Arizona-based companies. Together, these companies support over 130,000 workers and their families.

GoDaddy is the world's largest domain name register with more than 12 million customers, and like thousands of large and small American businesses, GoDaddy is a private equity-backed company. Last month, I visited their Tempe, Arizona, facility in my district. It is a state- of-the-art complex that promotes collaboration and innovation, and it employs over 1,000 Arizonans, including engineers, developers, and small business consultants. With the help and investment of private equity, GoDaddy will create hundreds of quality technology jobs for years to come.

By providing narrowly targeted regulatory relief to private equity fund advisers, this legislation improves the flow of capital to businesses in every community and in every district in the United States. This bill passed out of the House Financial Services Committee on a bipartisan vote. Following the committee vote, we worked together on a bipartisan fix to address two specific concerns.

First, the amendment strikes the bill's narrow exemption from the annual audit or surprise inspection requirements for some funds, ensuring that investors are able to verify that funds actually contain particular investments as claimed. Second, the amendment ensures that advisers will continue to deliver a plain language narrative brochure annually to both clients and the SEC.

All currently registered investment advisers remain subject to SEC registration and examination and the antifraud provisions of the Investment Advisers Act. This legislation does not reduce the SEC's authority to examine or to bring enforcement actions against private fund managers or eliminate any of the tools that the SEC has to pursue such actions. Further, private equity funds invest in companies for several years and, therefore, do not present systemic risks.

Private equity-backed businesses are a key driving force behind our economy, making critical national and local economic contributions. We must work together to create an environment that enables these companies to grow and succeed and expand opportunities for hardworking Americans.

Thank you again to my colleagues on both sides of the aisle for their work on this important legislation.

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