As John previewed, the SEC’s Small Business Capital Formation Advisory Committee held a meeting yesterday that was all about figuring out how to encourage more IPOs. Chairman Atkins shared remarks, as did Commissioners Peirce and Uyeda. Here are some of the ideas to make IPOs more attractive, particularly for smaller-cap companies, that were shared during the meeting:

– Expand an IPO light option for companies with modest revenues, a smaller market cap and a straightforward business model. For example, expand scaled disclosure, allow shorter registration statements, simplify compensation disclosure, streamline internal controls requirements and reduce filing burdens while a newly public company grows. The rules should be revised to go beyond the current accommodations for emerging growth companies (EGCs) and smaller reporting companies (SRCs).

– Help companies move more quickly in an IPO so they can move more opportunistically and take advantage of market windows. For example, eliminate or shorten the 15 day period between the public filing and roadshow, permit a tiered review by the SEC Staff, expand safe harbors for communications around an offering and do away with the requirement to include executive pay disclosures in the beginning of a new fiscal year before new financial statements are required.

– Reconsider quarterly reporting requirements. Permitting semiannual reporting plus current reporting for material events would preserve transparency while reducing unnecessary expense for smaller issuers.

– Improve capital raising opportunities after IPO. For example, incentivize analyst coverage for small issuers so that being public really does facilitate capital formation for those smaller cap companies. Also, while moving to a company registration model might seem pretty radical, if a company could move right to a prospectus supplement, that would be a meaningful improvement. Otherwise, access to shelf registration should be expanded so companies are eligible at 6 months post-IPO, with aligns with lock-up expiration.

– Reform the shareholder litigation landscape. One speaker suggested that the U.S. consider Canada’s loser pays framework for shareholder litigation to discourage weak cases that may be filed to pressure settlements.

– Improve communication & education about why going public is beneficial in the short- and long-term. Reform is needed but changing perception is also necessary.

– Enhance dual listing benefits – smaller companies are not inclined to dual list because it’s so burdensome.

– Views were mixed about whether private markets need to be reformed to make IPOs more attractive, which was referred to as a “Champagne Problem.” It’s so easy to stay private and raise and return capital as a private company nowadays that board members, venture funds, etc. are no longer pushing for IPOs. Making it easier to be a public company may not be enough to encourage smaller cap IPOs.

– Improve early price discovery, for example, by permitting earlier analyst-led investor engagement.

– Meredith Ervine