---
kind: "section"
citation: "15 U.S.C. § 78qq"
title: "15"
title_heading: "Commerce and Trade"
number: "78qq"
heading: "Small Business Capital Formation Advisory Committee"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/78qq"
units:
  - "Chapter 2B — Securities Exchanges"
---

# §78qq. Small Business Capital Formation Advisory Committee

- (a) **Establishment and purpose—**
  - (1) **Establishment—** There is established within the [Commission](/usc/15/78c.md?p=a-15) the Small Business Capital Formation Advisory Committee (hereafter in this section referred to as the “Committee”).
  - (2) **Functions—**
    - (A) **In general—** The Committee shall provide the [Commission](/usc/15/78c.md?p=a-15) with advice on the [Commission](/usc/15/78c.md?p=a-15)’s rules, regulations, and policies with regard to the [Commission](/usc/15/78c.md?p=a-15)’s mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation, as such rules, regulations, and policies relate to—
      - (i) capital raising by emerging, privately held small businesses (“emerging [companies](/usc/15/78c.md?p=a-19)”) and publicly traded [companies](/usc/15/78c.md?p=a-19) with less than $250,000,000 in public market capitalization (“smaller public [companies](/usc/15/78c.md?p=a-19)”) through [securities](/usc/15/78c.md?p=a-10) offerings, including private and limited offerings and initial and other public offerings;
      - (ii) trading in the [securities](/usc/15/78c.md?p=a-10) of emerging [companies](/usc/15/78c.md?p=a-19) and smaller public [companies](/usc/15/78c.md?p=a-19); and
      - (iii) public reporting and corporate governance requirements of emerging [companies](/usc/15/78c.md?p=a-19) and smaller public [companies](/usc/15/78c.md?p=a-19).
    - (B) **Limitation—** The Committee shall not provide any advice with respect to any policies, practices, actions, or decisions concerning the [Commission](/usc/15/78c.md?p=a-15)’s enforcement program.
- (b) **Membership—**
  - (1) **In general—** The [members](/usc/15/78c.md?p=a-3-A) of the Committee shall be—
    - (A) the Advocate for Small Business Capital Formation;
    - (B) not fewer than 10, and not more than 20, [members](/usc/15/78c.md?p=a-3-A) appointed by the [Commission](/usc/15/78c.md?p=a-15), from among individuals—
      - (i) who represent—
        - (I) emerging [companies](/usc/15/78c.md?p=a-19) engaging in private and limited [securities](/usc/15/78c.md?p=a-10) offerings or considering initial public offerings (“IPO”) (including the [companies](/usc/15/78c.md?p=a-19)’ officers and [directors](/usc/15/78c.md?p=a-7));
        - (II) the professional advisors of such [companies](/usc/15/78c.md?p=a-19) (including attorneys, accountants, investment bankers, and financial advisors); and
        - (III) the investors in such [companies](/usc/15/78c.md?p=a-19) (including angel investors, venture capital funds, and family offices);
      - (ii) who are officers or [directors](/usc/15/78c.md?p=a-7) of minority-owned small businesses or women-owned small businesses;
      - (iii) who represent—
        - (I) smaller public [companies](/usc/15/78c.md?p=a-19) (including the [companies](/usc/15/78c.md?p=a-19)’ officers and [directors](/usc/15/78c.md?p=a-7));
        - (II) the professional advisors of such [companies](/usc/15/78c.md?p=a-19) (including attorneys, auditors, [underwriters](/usc/15/78c.md?p=a-20), and financial advisors); and
        - (III) the pre-IPO and post-IPO investors in such [companies](/usc/15/78c.md?p=a-19) (both institutional, such as venture capital funds, and individual, such as angel investors); and
      - (iv) who represent [participants](/usc/15/78c.md?p=a-24) in the marketplace for the [securities](/usc/15/78c.md?p=a-10) of emerging [companies](/usc/15/78c.md?p=a-19) and smaller public [companies](/usc/15/78c.md?p=a-19), such as [securities](/usc/15/78c.md?p=a-10) [exchanges](/usc/15/78c.md?p=a-1), alternative trading systems, analysts, information processors, and [transfer agents](/usc/15/78c.md?p=a-25); and
    - (C) three non-voting [members](/usc/15/78c.md?p=a-3-A)—
      - (i) one of whom shall be appointed by the Investor Advocate;
      - (ii) one of whom shall be appointed by the North American [Securities](/usc/15/78c.md?p=a-10) [Administrators](/usc/15/636e.md?p=1) Association; and
      - (iii) one of whom shall be appointed by the [Administrator](/usc/15/636e.md?p=1) of the Small Business [Administration](/usc/15/636e.md?p=1).
  - (2) **Term—** Each [member](/usc/15/78c.md?p=a-3-A) of the Committee appointed under subparagraph [(B)](#b-1-B), [(C)(ii)](#b-1-C-ii), or [(C)(iii)](#b-1-C-iii) of paragraph (1) shall serve for a term of 4 years.
  - (3) **Members not Commission employees—** [Members](/usc/15/78c.md?p=a-3-A) appointed under subparagraph [(B)](#b-1-B), [(C)(ii)](#b-1-C-ii), or [(C)(iii)](#b-1-C-iii) of paragraph (1) shall not be treated as employees or agents of the [Commission](/usc/15/78c.md?p=a-15) solely because of membership on the Committee.
- (c) **Chairman; vice chairman; secretary; assistant secretary—**
  - (1) **In general—** The [members](/usc/15/78c.md?p=a-3-A) of the Committee shall elect, from among the [members](/usc/15/78c.md?p=a-3-A) of the Committee—
    - (A) a chairman;
    - (B) a vice chairman;
    - (C) a secretary; and
    - (D) an assistant secretary.
  - (2) **Term—** Each [member](/usc/15/78c.md?p=a-3-A) elected under [paragraph (1)](#c-1) shall serve for a term of 3 years in the capacity for which the [member](/usc/15/78c.md?p=a-3-A) was elected under [paragraph (1)](#c-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](/usc/15/78c.md?p=a-15).
  - (2) **Notice—** The chairman of the Committee shall give the [members](/usc/15/78c.md?p=a-3-A) 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](/usc/15/78c.md?p=a-3-A) 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 under [section 5316 of title 5](/usc/5/5316.md) for each day during which the [member](/usc/15/78c.md?p=a-3-A) is engaged in the actual performance of the duties of the Committee; and
  - (2) while away from the home or regular place of business of the [member](/usc/15/78c.md?p=a-3-A) in the performance of services for the Committee, be allowed travel expenses, including per diem in lieu of subsistence, in the same manner as [persons](/usc/15/78c.md?p=a-9) employed intermittently in the Government service are allowed expenses under [section 5703 of title 5](/usc/5/5703.md).
- (f) **Staff—** The [Commission](/usc/15/78c.md?p=a-15) shall make available to the Committee such staff as the chairman of the Committee determines are necessary to carry out this section.
- (g) **Review by Commission—** The [Commission](/usc/15/78c.md?p=a-15) shall—
  - (1) review the findings and recommendations of the Committee; and
  - (2) each time the Committee submits a finding or recommendation to the [Commission](/usc/15/78c.md?p=a-15), promptly issue a public statement—
    - (A) assessing the finding or recommendation of the Committee; and
    - (B) disclosing the action, if any, the [Commission](/usc/15/78c.md?p=a-15) intends to take with respect to the finding or recommendation.
- (h) **Federal Advisory Committee Act—** The Federal Advisory Committee Act (5 U.S.C. App.)[^1] shall not apply with respect to the Committee and its activities.

## Footnotes

[^1]: See References in Text note below.

## Source credit

(June 6, 1934, ch. 404, title I, § 40, as added Pub. L. 114–284, § 2(b), Dec. 16, 2016, 130 Stat. 1450.)

## Notes

### Editorial Notes

### References in Text

The Federal Advisory Committee Act, referred to in subsec. (h), is Pub. L. 92–463, Oct. 6, 1972, 86 Stat. 770, which was set out in the Appendix to Title 5, Government Organization and Employees, and was substantially repealed and restated in chapter 10 (§ 1001 et seq.) of Title 5 by Pub. L. 117–286, §§ 3(a), 7, Dec. 27, 2022, 136 Stat. 4197, 4361. For disposition of sections of the Act into chapter 10 of Title 5, see Disposition Table preceding section 101 of Title 5.