BIO praises Rep. Robert Hurt for introducing HR 1912.
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Press Release Summary:
BIO applauds Rep. Robert Hurt (R-VA) for introducing the Small Company Disclosure Simplification Act (HR 1912) to reform the eXtensible Business Reporting Language compliance regime to reduce regulatory burden on small businesses. Legislation takes commonsense approach to the regulatory regime for public companies by exempting emerging growth companies from XBRL compliance and removing an expensive bureaucratic roadblock from the path of emerging biotech issuers.
Original Press Release:
BIO Praises Rep. Robert Hurt for Introducing the Small Company Disclosure Simplification Act
WASHINGTON--The Biotechnology Industry Organization (BIO) applauds Rep. Robert Hurt (R-VA) for introducing the Small Company Disclosure Simplification Act (HR 1912) to reform the eXtensible Business Reporting Language (XBRL) compliance regime to reduce the regulatory burden on small businesses.
“This legislation takes a commonsense approach to the regulatory regime for public companies by exempting emerging growth companies (EGCs) from XBRL compliance and removing an expensive bureaucratic roadblock from the path of emerging biotech issuers.”
“We would like to thank Rep. Hurt for introducing this legislation to minimize the costly regulatory burden of XBRL, which can delay scientific progress and slow the growth of promising emerging biotech companies," said Jim Greenwood, BIO’s President and CEO. "This legislation takes a commonsense approach to the regulatory regime for public companies by exempting emerging growth companies (EGCs) from XBRL compliance and removing an expensive bureaucratic roadblock from the path of emerging biotech issuers."
By requiring the SEC to study the effects of XBRL compliance on the market while giving emerging innovators a break from this costly regulatory burden, the bill provides important regulatory relief for small issuers.
Public companies are required to provide their financial statements in an interactive data format using XBRL. XBRL “tags” certain data points in issuers’ reports and exports them in a standardized format. XBRL is reported in a unique computing language – one that requires specific expertise outside the bounds of traditional financial or accounting training.
Companies need experts in the XBRL language to properly file the appropriate reports, so small issuers turn to external contractors to complete their XBRL filings. The cost of an external XBRL contractor is significant for an emerging company, reducing the capital available for more vital functions like research and development. The vast majority of investors do not consider data from XBRL reports when making investment decisions.
“The true value of a biotech company is found in scientific milestones and clinical trial advancement rather than financial disclosures. Investors often make their decisions based on these criteria, not XBRL filings. The cost of preparing these filings clearly outweighs any potential benefits," said Greenwood.
The legislation also will broaden the IPO On-Ramp created by the Jumpstart Our Business Startups (JOBS) Act by EGCs from the XBRL compliance requirement. More than 140 biotech companies have gone public using provisions in the JOBS Act, and this legislation will support their growth. It also will institute a temporary XBRL exemption for small public companies and require the SEC to make recommendations on how to improve the compliance mechanism.
For more information on the biotech industry and emerging companies can be found at www.bio.org.
About BIO
BIO is the world's largest trade association representing biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world’s largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world. BIOtechNOW is BIO's blog chronicling “innovations transforming our world” and the BIO Newsletter is the organization’s bi-weekly email newsletter. Subscribe to the BIO Newsletter.
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