An On-Ramp for IPOs
NYSE Euronext supports policies to boost capital access for emerging growth companies.
As part of the IPO Task Force — a group of investment bankers, venture capitalists and investors — NYSE Euronext submitted to the U.S. Treasury and Congress the following recommendations aimed at helping emerging growth companies access the capital they need to generate jobs and stimulate the U.S. economy.
1. Create a new category of “emerging growth issuers” and provide them with an “on-ramp” for compliance with portions of the Sarbanes-Oxley and Dodd-Frank acts. Companies with total annual gross revenue of less than $1 billion at IPO registration and that the SEC does not recognize as large, accelerated filers would have up to five years from the IPO to scale up to compliance.
2. Increase the availability and flow of company information and research to investors before and after an IPO. The recommendations include eliminating unnecessary quiet periods and unnecessary restrictions on analyst communications.
3. Improve the education and the involvement of issuer management and boards, helping to more efficiently connect buyers and sellers of emerging-company stocks.
NYSE Euronext made these recommendations a key part of its overall advocacy plan and has worked closely with Congress to turn these ideas into legislation. Subsequently, the “Reopening American Capital Markets to Emerging Growth Companies Act of 2011” was introduced in both the House of Representatives and the Senate with broad bipartisan support.
“Young, innovative companies are the engines of economic growth and job creation,” says NYSE Euronext Executive Vice President Scott Cutler. “We are proud to support this bipartisan effort to reduce their obstacles to going public and to accessing the capital to hire more employees. We believe this legislation will have a direct impact on capital formation, economic growth and job creation in the U.S.”