With overwhelming bipartisan support, on July 17 the U.S. House of Representatives approved the JOBS and Investor Confidence Act of 2018 (S. 488), also known as the JOBS Act 3.0. It aims to jumpstart startups and encourage more U.S. IPOs, though its impact is potentially much more far-reaching.

The JOBS Act 3.0 consolidates 32 bills that have previously passed the House or the House Financial Services Committee. The legislation’s primary goal is to ease regulatory barriers on small companies to reduce the cost of going public. Many of its provisions relate directly to startups and IPOs, such as making it easier to test the waters with confidential submissions, loosening the definition of accredited investors, and expanding access to capital for ‘main street’ and rural small businesses.

However, the bill could also have significant consequences for already-listed companies and their investors. Certain of its provisions relate to reducing regulation more generally, and in particular to rolling back Dodd-Frank; for example, removing stress test requirements for non-bank financial institutions.

One section looks to ease the regulatory ‘burden’ relating to quarterly reporting. Section 2201 calls on the SEC to conduct a cost/benefit review of the existing requirement that public companies submit quarterly financial reports using Form 10-Q. Contrary to the bill’s purported focus, the proposed review would rethink “the use of a standardized reporting format across all classes of reporting companies” (emphasis added).

A switch from the standardized 10-Q to “alternative formats for quarterly reporting” (think earnings guidance press releases) could have a substantial impact on the level of disclosure afforded to investors. Independent auditor review would no longer be required, and the lack of a standardized format (and data tagging) could make it harder for investors to make use of what information is provided. In response to an earlier House subcommittee hearing on the subject, CII warned that the move “…would appear to potentially reduce the quality of the quarterly financial information reported and weaken the discipline and accountability of the company’s reporting practices….”

The bill isn’t entirely about removing regulations, however. Section 2701 would prompt another SEC review, this time into the efficacy of Rule 105b-1, which governs insider trading. In particular, the SEC would be tasked with examining when trading plans can be adopted or modified, limits on the number of overlapping trading plans an insider can put in place, and a potential delay on when a new plan can be put into practice.

Elsewhere, there’s even the prospect of additional disclosure requirements. Section 2901 would modify existing ownership disclosure rules under the Securities Exchange Act of 1934 for directors, named executive officers and significant owners. For all such persons, companies with multi-class voting structures would be required to disclose the number of shares of all classes of voting securities beneficially owned as a percentage of total outstanding securities and the total combined voting power that those securities represent.

The provision reflects the growing prevalence of complex share structures involving differential voting rights, which have become particularly concentrated among tech companies. Getting more information on these companies’ ownership structures should help investors assess their interests; nonetheless, the tacit normalization of multi-class share structures inherent to the change may give governance-enthusiasts some pause.

The bill now goes to the Senate.

Starlar is an analyst covering the U.S. market.