The legislation mandates that professional investors, including venture capital and private equity firms, implement compliance guidelines established by the attorney general. These guidelines will require investors to create written policies that promote accountability and transparency in their dealings with historically disadvantaged communities. Professional investors must conduct self-evaluations every three years to assess their commitment to funding individuals and entities from these historically marginalized groups, thus potentially reshaping the investment landscape in Massachusetts.
Summary
House Bill 1922, titled 'An Act Relative to Fair Investment,' seeks to regulate investment practices within the Commonwealth of Massachusetts, especially focusing on promoting fairness and equity in the allocation of investment capital. The bill introduces Chapter 151G to the General Laws, which defines key terms related to investment and outlines the responsibilities of professional investors. The central aim of this legislation is to ensure that historically disadvantaged members of protected classes receive equitable access to funding from investment firms, thus addressing systemic disparities in investment allocations.
Contention
While the bill has garnered support for its goals of enhancing diversity in investment practices, it has faced criticism from some industry stakeholders who argue that such regulations could impose undue burdens on their operations. Critics also express concerns that the stipulations might lead to unintended consequences, such as discouraging investments in certain sectors deemed riskier by professional investors. Proponents counter that the legislation is a vital step toward equity in investment, aiming to rectify historical imbalances that have long persisted in the financial landscape.
Directs Secretary of State to contract with qualified vendor to develop national marketing campaign promoting State's innovation economy; appropriates $1,000,000.