The White House is reviewing new US Securities and Exchange Commission rules that would make it easier for companies to go public or raise capital by easing disclosures for new offerings and speeding up the registration process.
According to the SEC, one proposal would overhaul offering rules to “modernize the shelf registration process,” which could allow more companies to issue securities faster in order to take advantage of favorable market conditions.
Another proposal would expand the availability of simplified filing requirements currently only permitted for emerging growth companies — new issuers with total gross revenue under $1.235 billion. Those companies are allowed to make fewer investor disclosures and provide audited financial statements for just two years, rather than three.
The proposed rule changes, which were previewed by SEC Chairman Paul Atkins in a speech earlier this week, were received by the White House on Wednesday, according to a post on the Office of Management and Budget website.
“A critical part of Chairman Atkins’ agenda is his plan to Make IPOs Great Again, which he’s indicated will include rulemakings to allow more companies to benefit from reduced regulatory burdens and easier access to our public capital markets,” the SEC said in a statement. “As with any rulemaking, the public will have the opportunity to comment on the proposals and make their feedback heard.”
Among the changes Atkins plans to propose is allowing publicly-traded companies to make financial disclosures only twice a year, rather than quarterly.
The commission, currently down to three Republican members, would have to vote on the proposal after the White House sends it back to the agency with any edits, before it will be made public. The agency then takes public feedback and incorporates it into a final rule, which will also have to be voted on before it could take effect. The whole process typically takes between 18 to 24 months.
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