Middle Market IPO Cost Act
Officially: “Middle Market IPO Cost Act” Read the full text
What it does
Read it in plain language
1Short title
This section would let the Act be called the Middle Market IPO Cost Act.
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1. Short title This Act may be cited as the Middle Market IPO Cost Act .
2Study on IPO fees
This section would require the Comptroller General of the United States, working with the Securities and Exchange Commission and the Financial Industry Regulatory Authority, to study the costs that small- and medium-sized companies face in carrying out initial public offerings (IPOs). The study would have to consider the direct and indirect costs of an IPO, including fees paid to accountants, underwriters, and other outside advisors for the IPO; the cost of complying with federal and state securities laws at the time of the IPO; and any other IPO-related costs the Comptroller General decides to include. The study would also have to compare and analyze IPO costs against the costs of getting financing or liquidity through other means; consider how these costs affect the ability to raise capital; and analyze how these costs affect whether retail investors can get access to the public securities of small- and medium-sized companies. In addition, the study would have to analyze trends in IPOs over whatever time period the Comptroller General decides is appropriate for examining IPO pricing practices, looking at the number of IPOs; how costs for IPOs have changed over time for underwriters, investment advisory firms, and other professionals providing IPO-related services; the number of brokers and dealers active in underwriting IPOs; the different services that underwriters and related persons provide before and after a small- or medium-sized company's IPO and the factors that affect IPO costs; changes in the cost and availability of investment research for small- and medium-sized companies; and the impact of litigation and its costs on being a public company. Not later than 360 days after this Act is enacted, the Comptroller General would have to issue a report to Congress containing all findings and determinations from the study and any administrative or legislative recommendations the Comptroller General may have.
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2. Study on IPO fees (a) Study The Comptroller General of the United States, in consultation with the Securities and Exchange Commission and the Financial Industry Regulatory Authority, shall carry out a study of the costs associated with small- and medium-sized companies to undertake initial public offerings ( IPOs ). In carrying out such study, the Comptroller General shall— (1) consider the direct and indirect costs of an IPO, including— (A) fees of accountants, underwriters, and any other outside advisors with respect to the IPO; (B) compliance with Federal and State securities laws at the time of the IPO; and (C) such other IPO-related costs as the Comptroller General may consider; (2) compare and analyze the costs of an IPO with the costs of obtaining alternative sources of financing and of liquidity; (3) consider the impact of such costs on capital formation; (4) analyze the impact of these costs on the availability of public securities of small- and medium-sized companies to retail investors; and (5) analyze trends in IPOs over a time period the Comptroller General determines is appropriate to analyze IPO pricing practices, considering— (A) the number of IPOs; (B) how costs for IPOs have evolved over time for underwriters, investment advisory firms, and other professions for services in connection with an IPO; (C) the number of brokers and dealers active in underwriting IPOs; (D) the different types of services that underwriters and related persons provide before and after a small- or medium-sized company IPO and the factors impacting IPOs costs; (E) changes in the costs and availability of investment research for small- and medium-sized companies; and (F) the impacts of litigation and its costs on being a public company. (b) Report Not later than the end of the 360-day period beginning on the date of the enactment of this Act, the Comptroller General shall issue a report to the Congress containing all findings and determinations made in carrying out the study required under subsection (a) and any administrative or legislative recommendations the Comptroller General may have.
Where it is
In the House.