New SEC Commissioners Indicate Support for a Stronger, Re-Energized IPO Market in the U.S.; Attorney Laura Anthony Explains

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WEST PALM BEACH, Florida, July 12, 2017 /PRNewswire/ --

Statements and positions from new members of the Securities and Exchange Commission (SEC) indicate support for initiatives and strategies that can re-invigorate the U.S. initial public offerings (IPO) market and help it recover from what some investors have identified as a 15-year slump.

Hints at newfound support for the domestic IPO market come from SEC Commissioner Michael Piwowar in a May talk at the SEC-NYU Dialogue on Securities Regulation and June comments by Chair Jay Clayton at an Investor Advisory Committee meeting.

Clayton's stated intent to "actively explore ways in which we can improve the attractiveness of listing on our public markets, which maintaining important investor protections," is a step in the right direction for a healthier IPO market, according to Laura Anthony, a founding partner of Legal and Compliance, LLC, in West Palm Beach.

A fundamental policy and legislative shift in the federal government's approach to the IPO market, she writes, has the potential to lure investors back into the U.S. market and expand opportunities for small businesses, entrepreneurs and early-stage investors who need greater access to much-needed capital - and who have primarily been left out of the IPO market in recent years. In his remarks, Piwowar singled out the pronounced IPO impact from small businesses because of their innovative nature and their substantial contribution to job creation.

The SEC Commissioners support a healthier IPO market on several fronts, including the ability for companies to raise capital cost-effectively from a diverse group of investors, greater competition for private-equity investors and the possibility of overall richer investment portfolios. IPOs also increase opportunities for well-defined exit strategies, employee stock options and grants, and more robust disclosure requirements, they note.

Their renewed interest comes at a time when IPOs in the U.S. have dropped from 457 in the 1990s to 135 in 2000. At one time, the U.S. accounted for 30%-50% of all IPOs worldwide, a figure that has dropped to less than 10%. Most of that decline, according to Piwowar, is linked to the disappearance of small IPOs, which now account for less than 10% of all IPOs, compared to rates of 30%-60% in the 1980s and 1990s.

Causes for the weakened U.S. market are many, according to the SEC commissioners' statements, ranging from an increase in access to private capital, the impact of globalization, increased regulation from the Sarbanes-Oxley Act of 2002 and the JOBS Act, online crowd-funding, a rise in mergers and acquisitions of pre-public companies, cheaper debt financing, and a lack of underwriters for smaller IPOs.

While Anthony disagrees that cheaper debt financing is available to smaller companies, she agrees that the lack of underwriters remains a problem for the small IPO market, and she believes it goes beyond issues of industry consolidation and touches on deeper industry issues.

"I believe that the U.S. regulatory and trading system has reduced the available compensation for underwriters to complete smaller IPOs and for market markers to support their stock in the secondary market, to the point of outweighing the risks of completing transactions," Anthony says.

She advocates legislation to update and reform the venture market, a move that would support small businesses, combat fraud, and acknowledge the use of other types of capital-raising strategies by firms interested in going public, including activity in over-the-counter markets, reverse mergers, alternative public offerings, Regulation A+ strategies, and direct re-sale registration of existing shareholder securities.

The Author:

Securities attorney Laura Anthony and her experienced legal team provide ongoing corporate counsel to small and mid-size OTC and exchange traded issuers as well as private companies going public on the over-the-counter market, such as the OTCQB and OTCQX or an exchange such as NASDAQ or NYSE MKT. Legal & Compliance, LLC is a comprehensive corporate, securities and business transactions law firm assisting clients in all aspects of commerce, including initial public offerings, reverse mergers, registered public offerings, exempt private offerings, all forms of complex corporate finance transactions, compliance with national exchanges such as the NASDAQ and NYSE MKT and the over-the-counter market trading platforms such as OTCQB and OTCQX, compliance with FINRA and DTC, strategic planning for unique management and ownership issues, and broad-scope legal services. Laura Anthony, Esq. is an approved OTCQX Advisor (DAD/PAL). Laura Anthony, Esq., is also a contributing blogger to The Huffington Post the creator and author of SecuritiesLawBlog.com, ABA Journal's Top Blawg 100, and the producer and host of LawCast.com, The Securities Law Network. Attorney Laura Anthony is recognized by Martindale-Hubbel as one of America's Most Honored Professionals and the recipient of the Martindale-Hubbel Distinguished® Rating.  

http://www.SecuritiesLawBlog.com   

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Contact:        
Laura Anthony, Esq.
Founding Partner
Legal & Compliance, LLC
 +1-561-514-0936
[email protected]
http://www.LegalAndCompliance.com   

SOURCE Legal & Compliance, LLC