OTC Markets Group Inc (OTCQX:OTCM) is congratulating lawmakers for introducing bipartisan legislation on Tuesday that would help qualified public companies trading on an over-the-counter market to offer Employee Stock Ownership Plans (ESOPs).
The ESOP Fairness Act (S.3270) (H.R.5851) was put forth simultaneously by Senators Thom Tillis (R-NC) and Gary Peters (D-MI) and Representatives Mike Kelly (R-PA-16) and Brian Higgins (D-NY-26) in the House.
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ESOPs provide a means for employees to take an ownership stake in their companies, which helps business grow by adding value to corporate equity and improving employee retention.
Current IRS regulations, though, make it difficult for companies that don’t trade on national securities exchanges (NYSE and Nasdaq) to offer ESOPs to their employees.
If passed, the ESOP Fairness Act would allow hundreds of US companies and community banks, such as those traded on the OTCQX Best Market, to share in these benefits.
OTC Markets Group has long supported ESOP reform for small companies on the OTCQX market and is pleased to see a bipartisan group of legislators taking up the issue.
"We thank Senators Tillis and Peters, and Representatives Kelly and Higgins, for introducing theESOP Fairness Act,” OTC Markets Group General Counsel Dan Zinn said in a press release.
“Their thoughtful legislation stands to make ESOPs more effective for hundreds of smaller companies and community banks, to benefit their many thousands of employees across the country."
For Peters, a member of the Senate Commerce, Science and Transportation Committee, ESOPs are an important economic issue for companies in Michigan and across the country.
“Providing small businesses additional pathways to retain and recruit talent is critical to supporting the companies that help drive our state’s economy,” Peters said as part of a joint statement. “The ESOP Fairness Act would allow more small businesses across Michigan to easily offer ESOP plans to their employees, allowing them to expand corporate equity, aid employee retention and create jobs.”
"ESOP reform remains an important area where legislators can affect positive change to improve public markets for small US companies and make employee equity ownership more inclusive,” Zinn said. “Modernizing existing ESOP law to include an updated definition of an 'established securities market' will allow companies traded on the OTCQX Market to further invest in their long-term growth."
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