U.S. Securities & Exchange Commission Commissioner outlines possible reforms to make small company IPOs more viable

In remarks to the Small Business Capital Formation Advisory Committee, U.S. Securities & Exchange Commission Commissioner Mark T. Uyeda said the current Commission is pursuing a reform agenda to reverse the decline in public companies and asked for input on changes that could make small company initial public offerings more viable. He said the economics of going public are particularly difficult for smaller issuers because fixed compliance costs, underwriter economics and a regulatory framework designed for larger companies can prevent them from raising meaningful capital. The remarks were presented as his individual views, not necessarily those of the full Commission or other commissioners. Uyeda cited committee agenda data showing that small companies represented 44% of 2024 IPOs but raised only 3% of the capital, and noted that the Office of the Advocate for Small Business Capital Formation found 44% of small- and mid-cap stocks had no analyst coverage. He pointed to modernising shelf registration, revisiting quarterly reporting, and reviewing the emerging growth company framework and filer category thresholds as possible first steps, while also questioning whether rules on research coverage, underwriter compensation and post-IPO market-making are discouraging small company listings.