Yesterday, during remarks at the Stanford Rock Center for Corporate Governance, SEC Chairman Atkins kicked off the Commission’s request for comments on modernizing the IPO process. Noting that the Staff is “well underway” in its efforts to rationalize public company disclosure requirements (including with respect to executive compensation!), the Chairman noted, “Of course, the incentives for going public are only as effective as the process that companies must navigate to capitalize on them. With that in mind, I have asked the Commission staff to prepare recommendations to modernize the IPO process itself.” That includes the gun-jumping rules:

I routinely hear from companies and their advisors that one of the challenges of the IPO process is navigating the communication—or gun-jumping—rules under the Securities Act of 1933. In light of this, I would like to see any rulemaking in this area include considerable reforms to these rules. When Congress originally enacted the Securities Act, a company could not make any written or oral “offers” to sell securities before a registration statement became effective. But as Linda Quinn—a former director of the SEC’s Division of Corporation Finance—once questioned, “[d]o we need to continue to register offers?”

Over time, both Congress and the Commission eased the prohibition on offers. However, the Commission’s spider web of gun-jumping prohibitions and exceptions remains difficult to maneuver. Moreover, the last time that the Commission implemented significant reform in this area was more than 20 years ago. The ways in which businesses communicated with employees, customers, and potential investors at that time bears little resemblance to how they do so now. As the Commission staff prepares its recommendations, I look forward to constructing a more harmonized set of rules that offer clarity, simplicity, and congruity with today’s technology.

It also includes reassessing the method by which companies go public – including de-SPACs and (perhaps especially) direct listings.

As we look for ways to improve the process and method of becoming a public company, regulators and market participants might consider revisiting how direct listings are conducted and the associated legal requirements. As part of this consideration, it behooves us to ask questions such as: following the 2023 Supreme Court decision, does the market really believe that a Securities Act registration statement continues to offer meaningful investor protections in the direct listing context? Is the requirement to prepare a Securities Act registration statement—as opposed to an Exchange Act one—a hindrance for companies contemplating a direct listing? And beyond the form of the registration statement, are there other regulatory frictions in the direct listing process that the Commission or its staff can reduce through rulemaking or guidance, respectively, while preserving investor protections?

If you have thoughts on IPO modernization, Chairman Atkins stressed, “All ideas are most welcome. I have just one request—that you be bold and creative. And as you share your ideas, you have my word that we are listening.”

After the remarks, there’s information on how to submit comments:

Members of the public who wish to provide their views on ways to improve the SEC’s communication or other rules related to IPOs, or how the agency can remove roadblocks to methods of going public unrelated to a “traditional” IPO, may submit comments electronically or on paper . . . All submissions should refer to File Number CLL-16, and the file number should be included on the subject line if email is used. Please submit your comments as soon as possible and by no later than July 27, 2026.

Yes, July 27 is the same day comments on the Registered Offering Reform proposal are due, and you may have a number of comment letters in the works already. Thankfully, Chairman Atkins noted they will still consider comments received after that date.

– Meredith Ervine