"The commission's failure to promote capital formation has weakened public markets, hurt small businesses and entrepreneurs, and decreased opportunities for investors," the lawmakers wrote.
Instead of focusing on capital formation, the SEC has "focused on implementing costly regulatory disclosure requirements on topics that go beyond its scope," the lawmakers said.
Ms. Wagner also introduced a bill Thursday with Rep. Gregory Meeks, D-N.Y., who serves as a member of the House Financial Services Committee, that would amend the Investment Company Act of 1940 so it could not restrict closed-end management companies from investing in private funds.
"The bipartisan bill would increase access to investment for more Americans, creating opportunities for Main Street investors, and making clear that more investors should have access to private markets," Ms. Wagner said in an emailed statement.
Rep. Andy Barr, R-Ky., who chairs the Subcommittee on Financial Institutions and Monetary Policy, introduced two bills Thursday that would extend exemptions from SEC oversight for certain private equity and venture capital firms.
One bill aims to increase the threshold for private fund advisers' exemption from SEC registration. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, private advisers with less than $150 million in assets under management are exempt from registering with the SEC — the bill would tie that amount to inflation, allowing it to increase.
The other bill would extend the types of investments that venture capital fund advisers can make without requiring SEC registration. This includes "an equity security issued by a qualifying portfolio company" and "an investment in another venture capital fund," according to the bill text.
When asked for comment, Mr. Barr's communications director referred to the representative's comment included in a Wall Street Journal article Tuesday: "Now more than ever, we need to incentivize economic growth and lending to small businesses, entrepreneurs, and American innovators," Mr. Barr said.
The Subcommittee on Capital Markets began its fourth and final hearing on capital formation Wednesday afternoon.
"As we look ahead, there is much work to be done to ensure that our capital markets are functioning efficiently and effectively for all Americans," Ms. Wagner, who serves as chairwoman of the subcommittee, said in her opening statement. "This includes supporting policies that promote investment, encourage innovation, and remove unnecessary regulatory burdens."
