Earlier this week, the SEC’s Office of the Advocate for Small Business Capital Formation and the Division of Corporation Finance co-hosted a virtual roundtable for the purpose of re-examining the IPO process and reassessing the framework for how companies of all sizes access public capital. As noted in the agenda for the program, the moderators were Courtney Haseley from the Office of the Advocate for Small Business Capital Formation and Ted Yu from the SEC Division of Corporation Finance, and the engaged with speakers from law firms, an investment bank, the NYSE and OTC Markets.

The panelists discussed the SEC’s current rulemaking agenda, and were generally supportive of the SEC’s proposal to permit companies to choose to provide semiannual reports rather than quarterly reports. The panelists noted that it is uncertain to tell at this point whether companies would embrace the semiannual reporting option if the rule proposal were ultimately adopted, noting that factors such as peer practices, contractual restrictions and capital-raising consideration would likely influence whether companies would choose the optional semiannual reporting approach. On the topic of capital raising, the panelists expressed support for the SEC’s recent proposal to reform the registered offering process.

The panelists also discussed ideas for improving the IPO process, and a number of topics were addressed. The panelists discussed how it would be helpful to eliminate regulatory differences between going public through an underwritten offering versus a de-SPAC or reverse merger process. They noted that the SEC should consider reducing or eliminating the 15-day waiting period from the time of making a public filing of a registration statement following confidential review to the launch of the IPO. The panelists discussed how the SEC might reconsider gun-jumping restrictions and other communications limitations in connection with the IPO process, as well as easing restrictions on the involvement of research analysts in the IPO process. Further, the group discussed the costs and effort necessary to get ready for an IPO, and in particular the impact of PCAOB requirements when preparing the required financial information.

This type of dialogue is always useful, and hopefully it will inform that SEC’s efforts as they proceed along the “Make IPOs Great Again” path.

– Dave Lynn