In the May 10, 2017 dialogue held by the SEC’s Division of Economic and Risk Analysis and New York University’s Stern School of Business, academics and industry representatives provided recommended measures for rejuvenating the U.S.’s IPO market. Such measures, aimed at increasing the incentive for companies of varying sizes, geographic backgrounds and industries to utilize and thrive in the public markets, included the following recommendations:
- Exempt dividends from taxation at the corporate level for all public companies.
- Increase regulations on private companies to align them with public companies. These regulations can include mandatory accounting standards and restrictions on ownership.
- Exclude accredited investors from 500 shareholder thresholds for private companies under Section 12(g) of the Exchange Act to ensure that companies are able to enter the public market at the most advantageous time.
- Require disclosure of short positions for small public companies to make smaller companies more attractive to institutional investors.
- For public companies, base operational decisions on investment and growth of the company rather than meeting earnings guidance. Public companies should speak to investors about the long term and get independent directors involved in the company’s strategy.