SEC Small Business Advocate Act of 2016
PL 114-284 (H.R.3784), enacted 12/16/2016

130 STAT. 1447 
PUBLIC LAW 114–284—DEC. 16, 2016 
Public Law 114–284 
114th Congress 
An Act 
To amend the Securities Exchange Act of 1934 to establish an Office of the Advocate 
for Small Business Capital Formation and a Small Business Capital Formation 
Advisory Committee, and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘SEC Small Business Advocate 
Act of 2016’’. 
SEC. 2. ESTABLISHMENT OF OFFICE OF THE ADVOCATE FOR SMALL 
BUSINESS CAPITAL FORMATION AND SMALL BUSINESS CAP-
ITAL FORMATION ADVISORY COMMITTEE. 
(a) OFFICE OF THE ADVOCATE FOR SMALL BUSINESS CAPITAL 
FORMATION.—Section 4 of the Securities Exchange Act of 1934 
(15 U.S.C. 78d) is amended by adding at the end the following: 
‘‘(j) OFFICE OF THE ADVOCATE FOR SMALL BUSINESS CAPITAL 
FORMATION.— 
‘‘(1) OFFICE ESTABLISHED.—There is established within the 
Commission the Office of the Advocate for Small Business 
Capital Formation (hereafter in this subsection referred to as 
the ‘Office’). 
‘‘(2) ADVOCATE FOR SMALL BUSINESS CAPITAL FORMATION.— 
‘‘(A) IN
GENERAL.—The head of the Office shall be 
the Advocate for Small Business Capital Formation, who 
shall— 
‘‘(i) report directly to the Commission; and 
‘‘(ii) be appointed by the Commission, from among 
individuals having experience in advocating for the 
interests of small businesses and encouraging small 
business capital formation. 
‘‘(B) COMPENSATION.—The annual rate of pay for the 
Advocate for Small Business Capital Formation shall be 
equal to the highest rate of annual pay for other senior 
executives who report directly to the Commission. 
‘‘(C) NO
CURRENT
EMPLOYEE
OF
THE
COMMISSION.— 
An individual may not be appointed as the Advocate for 
Small Business Capital Formation if the individual is cur-
rently employed by the Commission. 
‘‘(3) STAFF OF OFFICE.—The Advocate for Small Business 
Capital Formation, after consultation with the Commission, 
may retain or employ independent counsel, research staff, and 
Consultation. 
Appointment. 
15 USC 78a note. 
SEC Small 
Business 
Advocate Act of 
2016. 
Dec. 16, 2016 
[H.R. 3784] 
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130 STAT. 1448 
PUBLIC LAW 114–284—DEC. 16, 2016 
service staff, as the Advocate for Small Business Capital Forma-
tion determines to be necessary to carry out the functions 
of the Office. 
‘‘(4) FUNCTIONS
OF
THE
ADVOCATE
FOR
SMALL
BUSINESS 
CAPITAL FORMATION.—The Advocate for Small Business Capital 
Formation shall— 
‘‘(A) assist small businesses and small business inves-
tors in resolving significant problems such businesses and 
investors may have with the Commission or with self- 
regulatory organizations; 
‘‘(B) identify areas in which small businesses and small 
business investors would benefit from changes in the regu-
lations of the Commission or the rules of self-regulatory 
organizations; 
‘‘(C) identify problems that small businesses have with 
securing access to capital, including any unique challenges 
to minority-owned and women-owned small businesses; 
‘‘(D) analyze the potential impact on small businesses 
and small business investors of— 
‘‘(i) proposed regulations of the Commission that 
are likely to have a significant economic impact on 
small businesses and small business capital formation; 
and 
‘‘(ii) proposed rules that are likely to have a signifi-
cant economic impact on small businesses and small 
business capital formation of self-regulatory organiza-
tions registered under this title; 
‘‘(E) conduct outreach to small businesses and small 
business investors, including through regional roundtables, 
in order to solicit views on relevant capital formation 
issues; 
‘‘(F) to the extent practicable, propose to the Commis-
sion changes in the regulations or orders of the Commission 
and to Congress any legislative, administrative, or per-
sonnel changes that may be appropriate to mitigate prob-
lems identified under this paragraph and to promote the 
interests of small businesses and small business investors; 
‘‘(G) consult with the Investor Advocate on proposed 
recommendations made under subparagraph (F); and 
‘‘(H) advise the Investor Advocate on issues related 
to small businesses and small business investors. 
‘‘(5) ACCESS TO DOCUMENTS.—The Commission shall ensure 
that the Advocate for Small Business Capital Formation has 
full access to the documents and information of the Commission 
and any self-regulatory organization, as necessary to carry out 
the functions of the Office. 
‘‘(6) ANNUAL REPORT ON ACTIVITIES.— 
‘‘(A) IN GENERAL.—Not later than December 31 of each 
year after 2015, the Advocate for Small Business Capital 
Formation shall submit to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Com-
mittee on Financial Services of the House of Representa-
tives a report on the activities of the Advocate for Small 
Business Capital Formation during the immediately pre-
ceding fiscal year. 
‘‘(B) CONTENTS.—Each report required under subpara-
graph (A) shall include— 
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130 STAT. 1449 
PUBLIC LAW 114–284—DEC. 16, 2016 
‘‘(i) appropriate statistical information and full and 
substantive analysis; 
‘‘(ii) information on steps that the Advocate for 
Small Business Capital Formation has taken during 
the reporting period to improve small business services 
and the responsiveness of the Commission and self- 
regulatory organizations to small business and small 
business investor concerns; 
‘‘(iii) a summary of the most serious issues encoun-
tered by small businesses and small business investors, 
including any unique issues encountered by minority- 
owned and women-owned small businesses and their 
investors, during the reporting period; 
‘‘(iv) an inventory of the items summarized under 
clause (iii) (including items summarized under such 
clause for any prior reporting period on which no action 
has been taken or that have not been resolved to 
the satisfaction of the Advocate for Small Business 
Capital Formation as of the beginning of the reporting 
period covered by the report) that includes— 
‘‘(I) identification of any action taken by the 
Commission or the self-regulatory organization 
and the result of such action; 
‘‘(II) the length of time that each item has 
remained on such inventory; and 
‘‘(III) for items on which no action has been 
taken, the reasons for inaction, and an identifica-
tion of any official who is responsible for such 
action; 
‘‘(v) recommendations for such changes to the regu-
lations, guidance and orders of the Commission and 
such legislative actions as may be appropriate to 
resolve problems with the Commission and self-regu-
latory organizations encountered by small businesses 
and small business investors and to encourage small 
business capital formation; and 
‘‘(vi) any other information, as determined appro-
priate by the Advocate for Small Business Capital 
Formation. 
‘‘(C) 
CONFIDENTIALITY.—No 
report 
required 
by 
subparagraph (A) may contain confidential information. 
‘‘(D) INDEPENDENCE.—Each report required under 
subparagraph (A) shall be provided directly to the commit-
tees of Congress listed in such subparagraph without any 
prior review or comment from the Commission, any 
commissioner, any other officer or employee of the Commis-
sion, or the Office of Management and Budget. 
‘‘(7) REGULATIONS.—The Commission shall establish proce-
dures requiring a formal response to all recommendations sub-
mitted to the Commission by the Advocate for Small Business 
Capital Formation, not later than 3 months after the date 
of such submission. 
‘‘(8) GOVERNMENT-BUSINESS
FORUM
ON
SMALL
BUSINESS 
CAPITAL FORMATION.—The Advocate for Small Business Capital 
Formation shall be responsible for planning, organizing, and 
executing the annual Government-Business Forum on Small 
Business Capital Formation described in section 503 of the 
Procedures. 
Deadline. 
Recommenda- 
tions. 
Records. 
Summary. 
Analysis. 
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130 STAT. 1450 
PUBLIC LAW 114–284—DEC. 16, 2016 
Small Business Investment Incentive Act of 1980 (15 U.S.C. 
80c–1). 
‘‘(9) RULE OF CONSTRUCTION.—Nothing in this subsection 
may be construed as replacing or reducing the responsibilities 
of the Investor Advocate with respect to small business inves-
tors.’’. 
(b) SMALL
BUSINESS
CAPITAL
FORMATION
ADVISORY
COM-
MITTEE.—Title I of the Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.) is amended by adding at the end the following: 
‘‘SEC. 40. SMALL BUSINESS CAPITAL FORMATION ADVISORY COM-
MITTEE. 
‘‘(a) ESTABLISHMENT AND PURPOSE.— 
‘‘(1) ESTABLISHMENT.—There is established within the 
Commission the Small Business Capital Formation Advisory 
Committee (hereafter in this section referred to as the ‘Com-
mittee’). 
‘‘(2) FUNCTIONS.— 
‘‘(A) IN GENERAL.—The Committee shall provide the 
Commission with advice on the Commission’s rules, regula-
tions, and policies with regard to the Commission’s mission 
of protecting investors, maintaining fair, orderly, and effi-
cient markets, and facilitating capital formation, as such 
rules, regulations, and policies relate to— 
‘‘(i) capital raising by emerging, privately held 
small businesses (‘emerging companies’) and publicly 
traded companies with less than $250,000,000 in public 
market capitalization (‘smaller public companies’) 
through securities offerings, including private and lim-
ited offerings and initial and other public offerings; 
‘‘(ii) trading in the securities of emerging compa-
nies and smaller public companies; and 
‘‘(iii) public reporting and corporate governance 
requirements of emerging companies and smaller 
public companies. 
‘‘(B) LIMITATION.—The Committee shall not provide 
any advice with respect to any policies, practices, actions, 
or decisions concerning the Commission’s enforcement pro-
gram. 
‘‘(b) MEMBERSHIP.— 
‘‘(1) IN GENERAL.—The members of the Committee shall 
be— 
‘‘(A) the Advocate for Small Business Capital Forma-
tion; 
‘‘(B) not fewer than 10, and not more than 20, members 
appointed by the Commission, from among individuals— 
‘‘(i) who represent— 
‘‘(I) emerging companies engaging in private 
and limited securities offerings or considering ini-
tial public offerings (‘IPO’) (including the compa-
nies’ officers and directors); 
‘‘(II) the professional advisors of such compa-
nies (including attorneys, accountants, investment 
bankers, and financial advisors); and 
‘‘(III) 
the 
investors 
in 
such 
companies 
(including angel investors, venture capital funds, 
and family offices); 
15 USC 78qq. 
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130 STAT. 1451 
PUBLIC LAW 114–284—DEC. 16, 2016 
‘‘(ii) who are officers or directors of minority-owned 
small businesses or women-owned small businesses; 
‘‘(iii) who represent— 
‘‘(I) smaller public companies (including the 
companies’ officers and directors); 
‘‘(II) the professional advisors of such compa-
nies (including attorneys, auditors, underwriters, 
and financial advisors); and 
‘‘(III) the pre-IPO and post-IPO investors in 
such companies (both institutional, such as ven-
ture capital funds, and individual, such as angel 
investors); and 
‘‘(iv) who represent participants in the marketplace 
for the securities of emerging companies and smaller 
public companies, such as securities exchanges, alter-
native trading systems, analysts, information proc-
essors, and transfer agents; and 
‘‘(C) three non-voting members— 
‘‘(i) one of whom shall be appointed by the Investor 
Advocate; 
‘‘(ii) one of whom shall be appointed by the North 
American Securities Administrators Association; and 
‘‘(iii) one of whom shall be appointed by the 
Administrator of the Small Business Administration. 
‘‘(2) TERM.—Each member of the Committee appointed 
under subparagraph (B), (C)(ii), or (C)(iii) of paragraph (1) 
shall serve for a term of 4 years. 
‘‘(3) MEMBERS
NOT
COMMISSION
EMPLOYEES.—Members 
appointed under subparagraph (B), (C)(ii), or (C)(iii) of para-
graph (1) shall not be treated as employees or agents of the 
Commission solely because of membership on the Committee. 
‘‘(c) CHAIRMAN; VICE CHAIRMAN; SECRETARY; ASSISTANT SEC-
RETARY.— 
‘‘(1) IN GENERAL.—The members of the Committee shall 
elect, from among the members of the Committee— 
‘‘(A) a chairman; 
‘‘(B) a vice chairman; 
‘‘(C) a secretary; and 
‘‘(D) an assistant secretary. 
‘‘(2) TERM.—Each member elected under paragraph (1) 
shall serve for a term of 3 years in the capacity for which 
the member was elected under paragraph (1). 
‘‘(d) MEETINGS.— 
‘‘(1) FREQUENCY
OF
MEETINGS.—The Committee shall 
meet— 
‘‘(A) not less frequently than four times annually, at 
the call of the chairman of the Committee; and 
‘‘(B) from time to time, at the call of the Commission. 
‘‘(2) NOTICE.—The chairman of the Committee shall give 
the members of the Committee written notice of each meeting, 
not later than 2 weeks before the date of the meeting. 
‘‘(e) COMPENSATION AND TRAVEL EXPENSES.—Each member of 
the Committee who is not a full-time employee of the United States 
shall— 
‘‘(1) be entitled to receive compensation at a rate not to 
exceed the daily equivalent of the annual rate of basic pay 
in effect for a position at level V of the Executive Schedule 
Deadline. 
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130 STAT. 1452 
PUBLIC LAW 114–284—DEC. 16, 2016 
LEGISLATIVE HISTORY—H.R. 3784: 
HOUSE REPORTS: No. 114–408 (Comm. on Financial Services). 
CONGRESSIONAL RECORD, Vol. 162 (2016): 
Feb. 1, considered and passed House. 
Dec. 9, considered and passed Senate. 
under section 5316 of title 5, United States Code, for each 
day during which the member is engaged in the actual perform-
ance of the duties of the Committee; and 
‘‘(2) while away from the home or regular place of business 
of the member in the performance of services for the Committee, 
be allowed travel expenses, including per diem in lieu of subsist-
ence, in the same manner as persons employed intermittently 
in the Government service are allowed expenses under section 
5703 of title 5, United States Code. 
‘‘(f) STAFF.—The Commission shall make available to the Com-
mittee such staff as the chairman of the Committee determines 
are necessary to carry out this section. 
‘‘(g) REVIEW BY COMMISSION.—The Commission shall— 
‘‘(1) review the findings and recommendations of the Com-
mittee; and 
‘‘(2) each time the Committee submits a finding or rec-
ommendation to the Commission, promptly issue a public state-
ment— 
‘‘(A) assessing the finding or recommendation of the 
Committee; and 
‘‘(B) disclosing the action, if any, the Commission 
intends to take with respect to the finding or recommenda-
tion. 
‘‘(h) 
FEDERAL
ADVISORY
COMMITTEE
ACT.—The 
Federal 
Advisory Committee Act (5 U.S.C. App.) shall not apply with respect 
to the Committee and its activities.’’. 
(c) ANNUAL GOVERNMENT-BUSINESS FORUM ON SMALL BUSINESS 
CAPITAL FORMATION.—Section 503(a) of the Small Business Invest-
ment Incentive Act of 1980 (15 U.S.C. 80c–1(a)) is amended by 
inserting ‘‘(acting through the Office of the Advocate for Small 
Business Capital Formation and in consultation with the Small 
Business Capital Formation Advisory Committee)’’ after ‘‘Securities 
and Exchange Commission’’. 
Approved December 16, 2016. 
Assessment. 
Public 
information. 
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