Gunster’s Bob Lamm likes what he sees in the Society’s letter, but thinks that the SEC also needs to consider that the SRC category casts a wide net, and that not all companies falling within it have the same compliance infrastructure and resources. Here’s an excerpt from his recent blog:

However, even if the SEC accepts the Society’s recommendations (as I hope it does), the companies that would qualify as SRCs range in size from nano- or micro-caps to companies of a substantial size. As a result, compliance with requirements applicable to SRCs generally may be relatively easy for companies at the larger end of the range but very challenging for those at the smaller end of the range. We have seen this time and again in the past, perhaps most clearly in the climate disclosure rules that have, thankfully, ridden off into the sunset, but the problem will unquestionably arise again and again in the future.

Bob also argues that treating all SRCs alike from a regulatory perspective is one of the factors that deters smaller companies from accessing the capital markets through an initial public offering.

– John Jenkins