Both the equity capital markets and the debt capital markets in the United States are governed by the same basic regulatory framework and landscape. That framework includes laws, rules, and regulations at the federal level. In addition, each of the 50 states and certain other jurisdictions within the United States have separate sets of securities laws (so-called “blue sky laws”). While federal law preempts some categories of state securities regulation, certain areas — such as fraud — remain within the purview of state securities regulators.

At the federal level, the two principal statutes are the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Each offer and sale of securities (including equity and debt securities) must be registered under the Securities Act or must qualify for an exemption from registration. Importantly, the federal securities laws are transaction-based, not securities-based; subsequent offers and sales of the same securities must be registered or exempt. The Exchange Act regulates trading, disclosure, market participants, exchanges, regulatory enforcement, and other related matters, such as public reporting, proxy solicitations, tender offers, disclosure of ownership and trading of securities by company affiliates and exchange listing standards.

In addition, other federal securities statutes address key areas, including: the Trust Indenture Act of

1939, which regulates debt securities registered under the Securities Act; the Investment Company

Act of 1940, which regulates investment companies such as mutual funds; the Investment Advisers

Act of 1940, which regulates investment advisers; the Sarbanes-Oxley Act of 2002 (“SarbanesOxley”), which regulates corporate responsibility and financial disclosures; and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), which addresses consumer protection, trading restrictions, and corporate governance.

Listed public companies are also regulated by the securities exchanges on which they are listed, which is typically the New York Stock Exchange (the “NYSE”) or The Nasdaq Stock Market (“Nasdaq”), each of which has its own rules and regulations (subject to SEC approval) for initial and continued listing.

The U.S. Securities and Exchange Commission (“SEC”) is the primary regulator overseeing the equity and debt capital markets. The SEC has a three-part mission to facilitate capital formation, protect investors, and maintain fair, orderly, and efficient markets. Market participants under the SEC’s oversight include approximately 8,300 reporting companies, 4,000 publicly traded companies, 13,000 registered funds, 15,400 investment advisers, 3,400 broker-dealers, 24 national securities exchanges, 103 alternative trading systems, 10 credit rating agencies, and six active registered clearing agencies.

The SEC also oversees other regulatory bodies, including the Financial Industry Regulatory Authority (“FINRA”), the Municipal Securities Rulemaking Board, the Securities Investor Protection Corporation, the Public Company Accounting Oversight Board (“PCAOB”), and the Financial Accounting Standards Board (“FASB”).

Derivatives and commodities markets are regulated by the Commodity Futures Trading Commission.

The regulatory framework for debt capital markets in the United States is substantially the same as described above for equity capital markets. The same statutes, regulators, and disclosure obligations apply. However, certain additional and distinct elements apply specifically to debt capital markets:

The Trust Indenture Act of 1939 (“TIA”) is specifically applicable to registered debt offerings. The TIA requires that publicly registered debt securities be issued pursuant to a trust indenture that satisfies certain minimum standards designed to protect the interests of debt holders. The SEC reviews and qualifies the trustee appointed under the indenture to ensure compliance with the TIA’s requirements.

Credit rating agencies play a more prominent role in debt capital markets than in equity markets. The SEC oversees 10 nationally recognized statistical rating organizations (“NRSROs”) whose ratings of debt securities affect whether certain investors can purchase those securities and, in listed bond offerings, whether a bond meets the applicable listing standards of NYSE or Nasdaq.

Exchange listing of debt securities is subject to separate and distinct listing standards from equity securities. Non-convertible bonds are listed on Nasdaq and NYSE under dedicated bond listing standards (see Question 25).

For Rule 144A debt offerings (the most common form of non-registered debt offering), the securities are sold in a private placement to qualified institutional buyers (“QIBs”) and are typically accompanied by a registration rights agreement obligating the issuer to file a registration statement to exchange the privately placed securities for registered securities within a specified period. This exchange offer process is a key feature of the U.S. debt capital market that does not have a direct parallel in the equity markets.

Yes, the United States has several self-regulatory organizations (“SROs”) with significant delegated regulatory powers. Their role is substantial and, in many respects, operates in parallel with — and is complementary to — the role of the SEC.

Financial Industry Regulatory Authority (FINRA). FINRA is the most significant SRO in the U.S. securities markets. It is a non-governmental organization authorized by Congress to regulate member brokerage firms and exchange markets. FINRA operates under SEC oversight and writes and enforces rules governing the securities industry, examines firms for compliance, and disciplines registered representatives and member firms that fail to comply with its rules. All broker-dealers operating in the U.S. must register with FINRA. FINRA’s role in regulating the conduct of underwriters, placement agents, and broker-dealers gives it significant practical influence over the conduct of capital markets transactions.

NYSE and Nasdaq. The national securities exchanges — most significantly the NYSE and Nasdaq — function as SROs for companies listed on their respective exchanges. They adopt and enforce listing standards, including initial and continued listing requirements, corporate governance standards, and rules governing specific transactions (such as the 20% issuance rule and shareholder approval requirements). These rules are subject to SEC approval, but within that framework, the exchanges have significant authority to regulate the conduct of listed companies and market participants. Their listing standards frequently set the practical baseline for corporate governance in the United States for public companies.

Public Company Accounting Oversight Board (PCAOB). The PCAOB was established by

Sarbanes-Oxley to oversee the audits of public companies and broker-dealers. It sets auditing and related professional practice standards and inspects registered public accounting firms. The PCAOB is a significant SRO in the context of capital markets because audit quality and auditor independence are central to the integrity of disclosure in registered securities offerings.

Municipal Securities Rulemaking Board (MSRB). The MSRB regulates the municipal securities market, establishing rules for broker-dealers and banks that engage in municipal securities transactions.

Financial Accounting Standards Board (FASB). The FASB is a private-sector SRO that establishes financial accounting and reporting standards (U.S. GAAP) for public and private companies. The SEC has historically recognized FASB as the designated accounting standard-setter for issuers under the federal securities laws.

In aggregate, these SROs play an extremely important role in the U.S. capital markets regulatory landscape. Because the SEC is a relatively small federal agency relative to the scale of the U.S. markets, it relies substantially on these SROs to carry out day-to-day regulation and enforcement. However, the SEC retains ultimate supervisory authority and can override or amend SRO rules, and the SEC’s own enforcement authority — including the ability to bring civil and criminal proceedings — remains the ultimate backstop of market regulation.

A principal question for securities offerings in the United States is whether such offering will require registration with the SEC under the Securities Act, or whether the offering is exempt from registration.

Exemptions from registration include: private placements under Section 4(a)(2) of the Securities Act and Regulation D; private resales under Section 4(a)(1) of the Securities Act and Rule 144; offerings to qualified institutional buyers (“QIBs”) under Rule 144A; offshore offerings under Regulation S; issuances to employees, consultants, and advisors not for capital-raising under Rule 701; and issuances in connection with Chapter 11 bankruptcy under Section 1145 of the Bankruptcy Code.

While the SEC has established a variety of exemptions from registration, the exemption most commonly used by issuers in equity offerings are Section 4(a)(2) and Rule 506(b) under Regulation D, and the exemptions most commonly used in debt offerings are Rule 144A and Regulation S.

Section 4(a)(2) and Regulation D

Section 4(a)(2) of the Securities Act provides a general exemption from registration for private placements, i.e., any transaction by an issuer not involving a public offering. Any company, public or private, can use Section 4(a)(2). There is no limit on the amount of securities that may be sold in reliance on the Section 4(a)(2) exemption. However, there are investor limitations: only sophisticated investors who can fend for themselves, or investors with a pre-existing substantive relationship with the issuer, can invest in a Section 4(a)(2) offering. State “blue sky” securities regulation applies to securities sold under Section 4(a)(2) unless pre-empted by federal law.

Regulation D is a safe harbor which provides specific guidelines for conducting private placements under Section 4(a)(2). State securities regulation does not apply when securities are sold in compliance with the Regulation D safe harbor. Regulation D has several sub-parts that apply to different types of private placements (including private placements prohibiting general solicitation, private placements permitting general solicitation, and limited offerings). The most common of these is Rule 506(b). Companies conducting an offering under Rule 506(b) can raise an unlimited amount of money and can sell securities to an unlimited number of accredited investors. A 506(b) offering cannot use general solicitation or advertising to market the securities, and the securities cannot be sold to more than 35 non-accredited investors. All of the sub-parts of Regulation D are subject to “bad-actor” disqualification, meaning that if any officer, director, or 20% or larger shareholder of the issuer, or any promoter or underwriter of the offering, has committed certain bad acts (such as fraud), then the company cannot make use of the Regulation D safe harbor.

Section 4(a)(2) and Regulation D are transactional exemptions, meaning that the securities themselves are not exempt — the offering is. A separate registration or exemption would be required for a resale of the securities by the purchaser.

Section 4(a)(1)

Section 4(a)(1) exempts transactions by any person other than an issuer, underwriter, or dealer from the registration requirements of the Securities Act. The application of this exemption is more limited than it may appear because the term “underwriter” is defined very broadly under the Securities Act, and includes any person who has purchased any security with a view to distribution of the security as well as any person who participates in the distribution of the security.

Rule 144

Rule 144 provides a safe harbor from registration under Section 4(a)(1) for a shareholder to publicly sell “restricted securities” and “control securities” without being deemed to be an underwriter. Restricted securities are securities acquired directly or indirectly from the issuer or from an affiliate of the issuer, in a transaction not involving a public offering. Control securities are securities owned by a person who is an affiliate of the issuer. The requirements under Rule 144 vary based on whether the selling shareholder is an affiliate or not. Non-affiliates must have held the securities for a prescribed holding period (generally 6 months or 1 year) and, depending on the holding period that applies and whether the issuer is a former shell company, the issuer must have filed all required reports under the Exchange Act for a period of 12 months prior to the sale. Affiliates must satisfy additional requirements, including volume limitations and limitations on the manner in which the securities are sold, and must file notices with the SEC if sales exceed certain limits.

Rule 144A

Rule 144A under the Securities Act is a safe harbor from registration for private resales of securities to QIBs by a person other than the issuer of the securities. Reoffers and resales to QIBs in compliance with Rule 144A are not distributions and therefore the sellers are not underwriters of the securities (even though the initial purchasers buy securities from the issuer with a view to immediate resale, which would normally be considered a distribution). As a result, these reoffers and resales are exempt from registration under Section 4(a)(1).

QIBs are, generally, large institutional investors that own at least $100 million in investible assets. The exemption is often used by placement agents or other broker-dealers to re-sell debt or equity securities that were initially purchased from the issuer in a private placement under Section 4(a)(2). Securities sold under Rule 144A are restricted securities and cannot be freely resold to the public without registration or an exemption.

Regulation S

The Securities Act does not apply to offerings that are reasonably designed to “come to rest” outside of the United States. Regulation S of the Securities Act is a safe harbor for offers and sales made outside of the United States which, if made in compliance with Regulation S, will not be subject to Securities Act registration. Investors must be outside the United States or the transaction must be executed on a non-United States exchange with no “directed selling efforts” made in the United States. There are three tiers of offerings under Regulation S depending on the type of issuer and security, with varying offering and resale restrictions intended to address the risk that such securities flow back into the United States.

Rule 701

Rule 701 under the Securities Act exempts certain issuances of securities made to compensate employees, consultants, and advisors. This exemption is not available to companies that are required to file reports under the Exchange Act. A private company may sell up to the greater of $1 million of securities or an amount equal to 15% of the issuer’s total assets or 15% of the outstanding securities of the same class. If an issuer sells more than $10 million of securities in a 12-month period, it is required to provide certain financial and other disclosure to the persons that received securities in that period. Securities issued under Rule 701 are “restricted securities” and may not be freely traded unless the securities are registered, or the holders can rely on an exemption.

Section 1145

Section 1145 of the Bankruptcy Code exempts from registration securities offered and sold in exchange for claims, interests, or administrative expenses in connection with a Chapter 11 bankruptcy plan. Further, securities offered and sold under Section 1145 are deemed to be sold in a “public offering,” which means that they are freely tradable by non-affiliates of the debtor.

U.S. federal securities law prohibits any person from trading in a public company’s securities in breach of a fiduciary duty or other relationship of trust and confidence while in possession of “material” and “nonpublic” information (“MNPI”). Material information is information that would be considered important by a reasonable investor in making an investment decision. The SEC and U.S.

courts have not adopted a bright-line test for materiality, but examples of potentially material information include earnings estimates or results, significant merger and acquisition proposals or agreements, significant new products or discoveries or significant developments regarding customers or suppliers, changes in control or in management, changes in auditors, major litigation, securities offerings, dividends or stock splits, and bankruptcies. Nonpublic information is information that a company has not widely disseminated to the public. Courts in the U.S. will generally consider information to be widely disseminated if companies have disclosed it in, for example, daily newspapers or widely circulated public disclosure documents, such as prospectuses, quarterly and annual reports, and proxy statements. Additionally, a sufficient period of time must pass for the information to be absorbed by the market to be considered public. Nonpublic information may include corporate developments not yet announced, information available to analysts, brokers or institutional investors, and undisclosed facts that confirm or disprove widely circulated rumors.

“Insiders” include every person or entity that, by virtue of a fiduciary relationship with a company, has knowledge of or access to MNPI. Insiders typically stand in a position of trust and confidence to the company and its shareholders (i.e., officer, director, controlling shareholder, or employee) and owe a duty to use information entrusted to them solely for the company’s purposes and not for their personal benefit. This duty gives rise to an “abstain-or-disclose” doctrine, by which an insider is required to either abstain from trading (or “tipping” others) while aware of MNPI or ensure that information is fully disclosed and disseminated to the market before trading.

The consequences of an insider trading violation can be severe. There are significant criminal and civil penalties in the U.S. for persons who trade on MNPI.

To reduce the risk of insider trading, companies typically adopt insider trading policies. These policies are often more stringent than applicable law. For example, these policies often include: prescribed periodic trading “blackouts” imposed by a company on insiders prior to the public disclosure by the company of all MNPI, which periodic blackouts normally precede periodic press releases relating to results of operations and financial condition for a preceding operating period; event-driven ad hoc blackouts imposed by management in the event of the occurrence of MNPI, which blackout may be imposed on all or a portion of a company’s insiders, depending on the access to the MNPI; preclearance procedures for directors and officers to trade in the company’s securities; and guidelines for adopting safe-harbor trading plans by individual directors and officers that, if properly structured, create a presumption that trades were not based on MNPI.

Prospectus Liability

Under the Securities Act, all securities offered or sold in the United States must be registered or qualify for an exemption from registration. If no exemption applies, the offer and sale must be registered by filing a registration statement with the SEC. The prospectus is the narrative portion of the registration statement that is used as the offering document to market the subject securities. The Securities Act and the Exchange Act each impose liability for material misstatements or omissions in a prospectus.

Section 11 of the Securities Act creates a private right of action for purchasers of securities based on the contents of a registration statement. If a registration statement, at the time it became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, any person acquiring securities by means of the registration statement may sue: (1) every person who signed the registration statement (i.e., the issuer and its officers and directors); (2) every person who was a director of the issuer at the time the registration statement was filed; (3) every person who, with his or her consent, is named as a director or director nominee in the registration statement; (4) every accountant, engineer, or appraiser who is named as having prepared or certified any part of the registration statement; and (5) every underwriter of the securities.

A Section 11 plaintiff does not need to establish a defendant’s scienter (i.e., an intention or knowledge of wrongdoing) or even negligence. Further, a plaintiff is not required to show specific reliance on the applicable statements in the registration statement to recover under Section 11. An issuer has almost no defenses under Section 11 and is strictly liable for material misstatements and omissions in registration statements. Other defendants have a variety of defenses, including a due diligence defense, with the defendant bearing the burden of proof.

Generally, the amount of damages in a Section 11 claim is the decrease in the value of the applicable securities, which is calculated as the difference between the price at which the securities were bought (capped at the public offering price) and the price at which the securities were sold, if the securities were sold before suit was filed, or the price as of the date the suit was filed, if the securities are still held as of that date. An underwriter’s liability under Section 11 is capped at the aggregate public offering price of the securities underwritten by the underwriter. Actions under Section 11 must be brought within one year from the time of discovery of the untrue statement or omission, or from the time such discovery should have been made by the exercise of reasonable diligence, and in no case more than three years after the security was first offered to the public.

Section 12(a)(1) of the Securities Act provides that any person who offers or sells a security required to be registered under the Securities Act that is not so registered is liable to the purchaser of that security. Section 12(a)(2) provides that any person who by use of any means of interstate commerce offers or sells a security on the basis of a materially false or misleading prospectus or materially false or misleading oral statements is liable to the person purchasing from him, unless he can show that he did not know, and could not in the exercise of reasonable care have known, of the falsehood or omission. Section 12 allows the purchaser to either rescind the purchase or to obtain damages from the seller if the securities are no longer held.

Section 10(b) of the Exchange Act and Rule 10b-5 thereunder prohibit the use of manipulative or deceptive devices in securities transactions. In general, to prevail on a Rule 10b-5 claim, a plaintiff must prove that the defendant made a false statement or an omission of material fact with scienter in connection with the purchase or sale of a security, upon which the plaintiff reasonably relied, and which proximately caused the plaintiff’s harm.

Due Diligence Defense

Underwriters and other offering participants (other than the issuer) can establish an affirmative defense to disclosure liabilities under Sections 11 and 12(a)(2) of the Securities Act by performing due diligence in connection with the securities offering. The requirements of the due diligence defense vary depending on whether the defendant is an “expert” and whether the portion of the registration statement at issue is “expertized.” Registration participants, including underwriters, attempt to establish a due diligence defense by seeking facts to support the statements made in the registration statement (i.e., by conducting a fact circle-up), asking questions of management and other experts to confirm that there is no material omission, and seeking officer certificates, comfort letters from auditors, and negative assurance letters from counsel.

Regulatory Sanctions and Disciplinary Measures

In addition to the private rights of action described above, U.S. regulators have broad authority to impose a wide range of sanctions and disciplinary measures on persons and entities that violate the federal securities laws.

SEC Civil Enforcement. The SEC’s Division of Enforcement can bring civil actions in federal court or administrative proceedings. Available remedies include: injunctions against future violations; disgorgement of ill-gotten gains plus prejudgment interest; civil monetary penalties (subject to periodic inflation adjustment); officer and director bars; trading suspensions; and revocation or suspension of registration for regulated entities such as broker-dealers and investment advisers.

Criminal Penalties. Willful violations of the Securities Act and the Exchange Act are subject to criminal prosecution by the U.S. Department of Justice. Individuals convicted of securities fraud under the Exchange Act face imprisonment of up to 20 years per count and fines of up to $5 million per count. Corporate defendants face fines of up to $25 million per count.

FINRA Disciplinary Actions. FINRA has authority to bring disciplinary proceedings against member broker-dealers and their registered representatives for violations of FINRA rules, including the imposition of fines, suspensions, and bars from the securities industry.

Exchange Sanctions. NYSE and Nasdaq can impose sanctions on listed companies for violations of listing standards, including public reprimands, trading halts, and delisting.

Both the Securities Act and the Exchange Act provide basic liabilities upon which an investor may bring a legal action. The remedies created under other federal securities laws generally are based in substance on the provisions of these two statutes.

Securities Act Provisions

Section 11 of the Securities Act creates a private right of action for purchasers of securities based on the contents of a registration statement filed with the SEC in connection with a public (non-exempt) offering. If a registration statement, at the time it became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, any person acquiring securities by means of the registration statement may sue: (1) every person who signed the registration statement; (2) every person who was a director of the issuer at the time the registration statement was filed; (3) every person named as a director or director nominee with his or her consent; (4) every accountant, engineer, or appraiser named as having prepared or certified any part of the registration statement; and (5) every underwriter of the securities.

A Section 11 plaintiff does not need to establish a defendant’s scienter or even negligence. Further, a plaintiff is not required to show specific reliance on the applicable statements in the registration statement to recover under Section 11. An issuer is strictly liable for material misstatements and omissions. Other defendants have a variety of defenses, including a due diligence defense.

Generally, the amount of damages in a Section 11 claim is the decrease in the value of the applicable securities (capped at the public offering price on the buy side). An underwriter’s liability is capped at the aggregate public offering price of the securities underwritten by that underwriter. Actions must be brought within one year from discovery of the untrue statement or omission, and in no case more than three years after the security was first offered to the public.

Section 12(a)(1) provides that any person who offers or sells a security required to be registered that is not so registered is liable to the purchaser. Section 12(a)(2) provides that any person who offers or sells a security on the basis of a materially false or misleading prospectus or materially false or misleading oral statements is liable to the purchaser, unless the seller can demonstrate that it did not know, and could not with reasonable care have known, of the falsehood or omission. The key difference between Section 11 and Section 12 is that Section 11 holds liable the persons responsible for a false or misleading registration statement for damages to any and all purchasers regardless of who the seller was, whereas Section 12 only holds liable the seller. Section 12 allows the purchaser to either rescind the purchase or to obtain damages from the seller.

Exchange Act Provisions

Section 10(b) and Rule 10b-5 prohibit the use of manipulative or deceptive devices in securities transactions, including making material misstatements or omissions and engaging in fraud in connection with the purchase or sale of any security. To prevail, a plaintiff must prove that the defendant made a false statement or omission of material fact with scienter, upon which the plaintiff reasonably relied, and which proximately caused the plaintiff’s harm. Rule 10b-5 can be enforced by the SEC in civil actions and by the Department of Justice in criminal prosecutions, and courts have also recognized a private right of action under Rule 10b-5.

Control Person Liability

Under Section 15 of the Securities Act, any person who controls a person liable under Section 11 or Section 12 is jointly and severally liable, unless the controlling person had no knowledge of, or no reasonable grounds to believe, the facts giving rise to the underlying liability. Similarly, Section 20 of the Exchange Act provides controlling persons are jointly and severally liable for Exchange Act violations committed by the controlled person, unless the controlling person acted in good faith and did not directly or indirectly induce the violation.

Key Minority Shareholder Protections

Most minority shareholder protections are contained in applicable state law rather than at the federal level. The Securities Act and the Exchange Act function primarily on a disclosure-based system, whereas substantive protections are a matter of state law. NYSE and Nasdaq rules also protect minority shareholders through requirements for board and committee independence, shareholder approval requirements for certain significant issuances, and policies governing the conduct of insiders.

The federal securities law remedies described in Question 7 above — including Sections 11, 12, and Rule 10b-5 — apply equally to debt securities where those securities were offered or sold in connection with a registered offering or on the basis of materially false or misleading statements.

Contractual Remedies Under the Indenture

In addition to the statutory remedies described in Question 7, debt holders have important contractual remedies under the indenture governing the applicable debt securities:

Events of Default. Indentures specify events of default, which typically include: failure to pay principal or interest when due; failure to comply with covenants (subject to applicable cure periods); cross-default to other material indebtedness; and insolvency or bankruptcy.

Acceleration. Upon an event of default, the trustee (acting on instruction from the requisite percentage of debt holders, typically 25% or a majority) or the required percentage of holders directly may declare the principal amount of all outstanding debt securities, together with accrued and unpaid interest, to be immediately due and payable.

Enforcement of Security. Where the debt securities are secured, the trustee (acting as or directing the collateral agent) may enforce security interests against the collateral, including by foreclosure, following an event of default.

Trustee Actions. The trustee is obligated to take certain actions following an event of default upon instruction from the requisite percentage of holders, including exercising remedies and pursuing legal proceedings against the issuer and any guarantors.

Guarantee Enforcement. Where material subsidiaries or the parent company have provided guarantees, debt holders (through the trustee) may enforce those guarantees directly against the guarantors upon an event of default.

Bankruptcy Proceedings. Following the commencement of a bankruptcy proceeding by or against the issuer, debt holders may participate in the bankruptcy process to protect and enforce their claims. The priority of debt holders’ claims (whether senior secured, senior unsecured, or subordinated) will determine their recovery.

The foregoing statutory remedies are in addition to the various contractual remedies available in a securities offering, including under applicable underwriting agreements (in the case of underwritten public offerings), purchase agreements (in the case of Rule 144A offerings), and other debt and collateral documentation and the rights and remedies thereunder available to debt holders in the event of defaults and bankruptcy proceedings.

Review of 2025 IPO Performance

U.S. IPOs showed steady gains in 2024 as inflation stabilized and interest rates edged downward in the fourth quarter, raising investor hopes for a strong IPO market in 2025. The U.S. IPO market entered 2025 well positioned for a strong year due to stabilizing interest rates, market expectations of a business-friendly U.S. administration, and the pressing need for private equity firms to exit portfolio companies.

In January 2025, 28 companies raised approximately $5.1 billion on the IPO market. Of these, 8 companies were SPACs raising approximately $1.1 billion. The IPO market then slowed a bit in February, when 28 companies raised approximately $4.7 billion (of which 8 were SPACs raising approximately $1.7 billion), and in March, 23 companies raised approximately $2.5 billion (of which 4 were SPACs raising approximately $561 million).

President Trump’s “Liberation Day” tariffs caused many companies to hit pause on their IPOs. Uncertainty regarding U.S. tariffs and retaliatory actions by other nations, and continuing market volatility, weighed on offerings. In April, U.S. IPOs were at their lowest level in 2025, with 32 companies raising approximately $4.5 billion (of which 13 were SPACs raising approximately $2.9

billion). After the dip in April, the IPO market began to recover. In May, 32 companies raised approximately $6.6 billion (of which 20 were SPACs raising approximately $4.5 billion), and in June, 28 companies raised approximately $6.7 billion (of which 12 were SPACs raising approximately $2.4 billion).

In July, 33 companies raised approximately $2.3 billion (of which 12 were SPACs raising approximately $2.2 billion). In August, 60 companies raised approximately $4.8 billion (of which 26 were SPACs raising approximately $4.6 billion). In September, 59 companies raised approximately $3.7 billion (of which 22 were SPACs raising approximately $3.6 billion).

In October, 41 companies raised approximately $3.9 billion (of which 20 were SPACs raising approximately $3.8 billion). In November, 32 companies raised approximately $4.1 billion (of which 21 were SPACs raising approximately $4 billion. In December 58 companies raised approximately $4.6 billion (of which 29 were SPACs raising approximately $4.4 billion).

January 2026 saw 44 companies raise approximately $2.6 billion (of which 14 were SPACs raising approximately $2.3 billion). In February, 37 companies raised approximately $3 billion (of which 16 were SPACs raising approximately $2.8 billion). In March, 34 companies raised approximately $2.4 billion (of which 15 were SPACs raising approximately $2.2 billion). In April, 42 companies raised approximately $3 billion (of which 17 were SPACs raising approximately $2.8 billion. In May, 46 companies raised approximately $3 billion (of which 15 were SPACs raising approximately $2.6 billion).

Crypto is Trending

Circle Internet Group, Inc., a cryptocurrency company, completed its IPO in June 2025, raising $1.05 billion. Circle’s IPO follows President Trump’s comments in March 2025 that he wants to make America the “Bitcoin superpower of the world and the crypto capital of the planet.”

Given President Trump’s statements, the SEC’s dismissal of many suits against crypto companies, and moves toward stablecoin legislation to reduce uncertainty, we can expect to see more cryptocurrency companies come to market in the near term.

Resurgence of SPAC IPOs

SPACs have started to make a comeback. The SPAC market boomed in 2021 but subsequently fell sharply because of mixed performance and the impact of SEC regulation. With a smaller, more select group of SPACs coming to market led by serial sponsors, activity levels are poised to improve. In 2025, through June 30, there were 65 SPAC IPOs, compared to only 16 at the same point in 2024.

The de-SPAC market has also proved to be an appealing route to capital formation. De-SPAC deals provide a longer and more flexible public marketing period for price discovery, can be structured to include earn-outs to bridge valuation gaps, and can be structured to provide capital certainty through a private investment in public equity (“PIPE”) or non-redemption agreements. The SPAC resurgence also ties into the crypto industry, as some recent SPAC IPOs are specifically seeking crypto companies and SPACs are exploring investing trust capital in cryptocurrencies.

Outlook for 2026

The 2026 fundraising outlook for U.S. capital markets is cautiously optimistic, subject to the trajectory of U.S. trade policy, monetary policy, and broader macroeconomic conditions. Key themes expected to shape the 2026 environment include:

• Trade policy clarity. The significant headwinds created by tariff uncertainty in 2025 are expected to moderate as trade negotiations mature. Greater policy clarity should reduce the risk premium embedded in new issuance pricing and encourage issuers who deferred their IPO plans in 2025 to re-engage with the market.
• Private equity exit pressure. The sustained backlog of private equity-backed companies seeking liquidity, built up over several years of depressed IPO activity, is expected to continue to drive the supply of IPO candidates. Sponsor-backed IPOs are anticipated to constitute a meaningful portion of overall volume.
• Crypto and digital assets. The developing regulatory framework for digital assets (discussed further in Question 29) and the mainstreaming of cryptocurrency-related businesses are expected to produce further capital markets activity from crypto-native and blockchainadjacent issuers.
• Debt markets. Investment grade and high yield debt markets performed strongly through 2025, supported by resilient credit fundamentals and stable spreads. Conditions for 2026 debt issuance are expected to remain favorable, though dependent on the interest rate environment and any deterioration in credit quality driven by macroeconomic headwinds.
• SEC registered offerings reform. On May 19, 2026, the SEC announced proposed amendments to the rules governing registered offerings. The amendments would simplify the registered offering framework, increase accessibility of certain offering pathways, save costs, and extend accommodations for emerging companies to about 81% of all current public companies.

Initial and Continued Listing Standards

The two principal exchanges for listing in the United States are the NYSE and Nasdaq. Before a company’s stock can begin trading on an exchange, the company must meet certain minimum financial and non-financial requirements, or “initial listing standards.” Initial listing standards generally include a company’s public float, total market value and stock price, and the number of publicly traded securities and shareholders of the company. For initial listing, the company also must comply with certain corporate governance requirements, including director independence and the establishment and composition of board committees. Companies that are foreign private issuers (“FPIs”) may take advantage of exemptions from some of the corporate governance requirements and instead follow their home country’s practices for corporate governance. Once listed, a company must continue to meet various financial and non-financial requirements, or “continued listing standards.” If a company fails to meet these continued listing standards, the exchange may remove or “delist” the company’s stock from the exchange. A principal consideration behind the listing standards is to ensure sufficient size and volume to permit a minimum amount of liquidity and efficient pricing of the securities.

Dual Listing

For dual listing on the NYSE or Nasdaq and a company’s home stock market, the company generally must meet the same listing requirements as for an initial listing on the NYSE or Nasdaq, in addition to any specific requirements of their home stock exchange.

Simplified Regime — MJDS for Canadian Issuers

Canadian public companies seeking to gain access to the U.S. capital markets can use a simplified regime called the Multi-jurisdictional Disclosure System (“MJDS”). The MJDS allows Canadian issuers to use their Canadian disclosure documents to meet public reporting obligations in the United States, rather than U.S.-style Exchange Act periodic reports (subject to complying with certain additional corporate governance and disclosure requirements mandated by Sarbanes-Oxley and Dodd-Frank). Additionally, a Canadian issuer conducting a public offering in the U.S. could file a registration statement that includes a prospectus prepared in accordance with Canadian form and content requirements, with an MJDS registration statement “wrapper” that includes certain required legends, and that filing would generally not be reviewed by the SEC. The Canadian disclosure regime is less rigorous than the U.S. disclosure regime — for example, U.S. requirements governing financial statement presentation and disclosure, management’s discussion and analysis, risk factor disclosure, executive compensation disclosure, and other requirements do not apply to a Canadian prospectus.

On February 27, 2026, the SEC adopted a final rule requiring directors and officers of FPIs to comply with the reporting obligations of Section 16(a) of the Exchange Act. The reporting requirements do not apply to beneficial owners of more than 10 percent of outstanding shares. In addition, directors and officers of FPIs are still exempt from short-swing profit liability under Section 16(b) and the short selling prohibition under Section 16(c).

SPAC Listing

A SPAC is a publicly traded shell company formed and managed by a sponsor for the purpose of merging with or acquiring one or more unidentified private operating companies (a “de-SPAC transaction”) within a specified timeframe. Once formed, a SPAC will conduct a firm commitment underwritten IPO, often issuing units consisting of shares of common stock and warrants. The SPAC’s sponsor is compensated through the issuance of founder shares. Following the IPO, the SPAC places all or substantially all of the IPO proceeds into a trust account. Both NYSE and Nasdaq require that at least 90% of the IPO proceeds be placed into a trust account that is inaccessible to the SPAC until the earlier of the completion of the de-SPAC transaction, the SPAC’s liquidation, or a shareholder vote to extend the SPAC’s life. Both exchanges also require that the de-SPAC transaction have an aggregate fair market value of at least 80% of the value of the assets held in the trust account.

In January 2024, the SEC adopted new rules designed to increase disclosures and provide additional investor protection in SPAC IPOs and de-SPAC transactions. The new rules require, among other things, enhanced disclosures about conflicts of interest, SPAC sponsor compensation, and dilution, and make the target company a “co-registrant” subject to Securities Act Section 11 liability for the statements made in the de-SPAC registration statement.

Estimated Costs and Timelines

Timeline. A traditional U.S. IPO typically takes between four and six months from the formal organizational kickoff to pricing and closing, assuming no significant SEC review delays. This timeline includes preparation of the registration statement and prospectus, SEC filing and review (typically one or more rounds of SEC comment letters), road show and investor education, and pricing and closing. Emerging growth companies (“EGCs”) may submit their registration statements confidentially to the SEC before publicly filing, which preserves flexibility on timing. Companies that are already SECreporting and eligible to use Form S-3 (or, for FPIs, Form F-3) may be able to access the capital markets on a shelf-registration basis, significantly compressing the timeline for follow-on offerings.

Costs. The principal costs of a U.S. IPO include:

• Underwriting discount: Typically 5–7% of gross IPO proceeds for a traditional U.S. IPO (the precise amount is negotiated and varies based on offering size and other factors).
• Legal fees: Issuers and underwriters each retain separate counsel. Combined legal fees for a mid-size IPO typically range from $2 million to $5 million or more.
• Accounting and audit fees: Including comfort letters and PCAOB audit requirements, typically $1 million to $3 million for a mid-size IPO.
• SEC registration fees: A modest fee based on the aggregate offering price, currently $138.10 per million dollars of securities registered (subject to periodic adjustment).
• Exchange listing fees: Initial listing fees at NYSE and Nasdaq for a typical IPO can range from approximately $50,000 to $325,000.
• Printing, filing, and other administrative costs: Typically $200,000–$500,000 for a mid-size IPO.

Dual or super voting capital arrangements are permitted for U.S.-listed companies, subject to significant limitations. These arrangements have implications and limitations under both federal securities law and related exchange rules as well as applicable state (e.g., Delaware) law.

Once a company is listed on a stock exchange, it cannot disparately reduce or restrict the voting rights of existing shareholders of publicly traded common stock. For example, listed companies cannot adopt time-phased voting plans or capped voting rights plans, or issue super-voting stock or stock with voting rights less than the per share voting rights of the existing common stock through an exchange offer.

Companies that have a super-voting share structure in place prior to listing on Nasdaq or NYSE generally can maintain that structure. However, it is common for super-voting structures to include a sunset (often from three to five years and up to seven years) on the duration of the super voting shares. In addition, the proxy advisory firms Institutional Shareholder Services (“ISS”) and Glass Lewis & Co. (“Glass Lewis”) negatively view companies with unequal voting rights and multiclass structures. ISS generally will recommend withholding votes or voting against directors individually, committee members, or the entire board, while Glass Lewis generally recommends voting against the chair of the governance committee, when a company employs a capital structure with unequal voting rights.

Most minority shareholder protections are contained in applicable state law rather than at the SEC or any other federal level. The Securities Act and the Exchange Act function primarily on a disclosurebased system, whereas substantive protections — such as those for minority shareholders — are a matter of state law. NYSE and Nasdaq also have numerous rules that protect the interests of minority shareholders, including requirements for board and committee independence, requirements for shareholder approval in the event of certain significant new issuances of shares, and the adoption of policies governing the conduct of insiders.

State corporate law — most importantly the Delaware General Corporation Law (“DGCL”), which governs most U.S. public companies — provides a range of substantive minority shareholder protections, including:

• Fiduciary duties. Directors owe fiduciary duties of care and loyalty to all shareholders, including minority shareholders. In certain circumstances (e.g., a sale of the company), the duty of loyalty requires directors to act in the best interests of shareholders as a whole.
• Appraisal rights. Under certain circumstances (such as a merger), dissenting shareholders have the right to seek judicial appraisal of the fair value of their shares.
• Shareholder derivative suits. Minority shareholders may bring derivative claims on behalf of the corporation against directors or officers for breaches of fiduciary duty.
• Inspection rights. Shareholders have statutory rights to inspect certain books and records of the corporation.

At the federal level, the SEC’s disclosure-based regime provides indirect protection to minority shareholders by requiring public companies to disclose material information on a timely basis, ensuring that minority shareholders can make informed investment decisions and hold management accountable through proxy voting.

No Formal Takeover Code

Unlike the United Kingdom and certain other jurisdictions, the United States does not have a centralized, mandatory takeover code comparable to the UK Takeover Code. There is no government or industry body that exercises comprehensive, rule-based oversight of takeover bids of the kind administered by the UK Panel on Takeovers and Mergers. Instead, U.S. takeover activity is regulated through a combination of federal securities laws, state corporate law, and exchange listing rules.

Federal Regulation of Tender Offers — The Williams Act

There is no U.S. federal securities law requiring a mandatory tender offer. If a person or group voluntarily commences a tender offer, or if an issuer voluntarily commences a self-tender offer, extensive rules govern how that tender offer must be conducted and the applicable disclosure and liability regime.

The Williams Act (enacted in 1968 as amendments to the Exchange Act) regulates voluntary tender offers and significant share acquisitions. Key provisions include:

• Section 13(d) disclosure. Any person or group that acquires beneficial ownership of more than 5% of any class of registered equity securities must disclose that fact by filing a Schedule 13D (or, for passive investors, a Schedule 13G) with the SEC within specified timeframes.
• Section 14(d) — Tender offer rules. A person who commences a tender offer for more than 5% of a class of registered equity securities must comply with extensive disclosure requirements, including filing a Schedule TO with the SEC. Target company boards must file a Schedule 14D-9 expressing their position on the bid. Tender offerors must keep the offer open for a minimum of 20 business days, and tendering shareholders have withdrawal rights during the offer period.
• “Best price” rule. All tendering shareholders in a tender offer must receive the same highest consideration paid to any other shareholder during the offer period.

State Law Regulation

State corporate law — primarily the DGCL for Delaware-incorporated companies — is the primary source of substantive regulation of change-of-control transactions. Delaware law imposes fiduciary duties on the board of directors and, in certain circumstances, requires boards to conduct a process designed to maximize value for all shareholders. Section 203 of the DGCL restricts “business combinations” between a Delaware corporation and an “interested stockholder” (broadly, a person who acquires 15% or more of the corporation’s voting stock) for a period of three years following the acquisition, unless the board approved the acquisition in advance or other specified conditions are met.

Squeeze-Out of Minority Shareholders

The United States does not have a statutory mandatory squeeze-out mechanism triggered automatically upon reaching a specified ownership threshold in the same manner as some other jurisdictions. However, minority shareholders can be squeezed out through the following mechanisms:

• Short-form merger (Delaware Section 253). Under the DGCL, a parent corporation that owns at least 90% of the outstanding shares of each class of a subsidiary’s stock may merge the subsidiary into itself without a shareholder vote of the subsidiary. This “short-form merger” effectively squeezes out minority shareholders of the subsidiary, who are entitled to receive the merger consideration and, if dissatisfied, to exercise statutory appraisal rights.
• Long-form merger. A controlling shareholder owning less than 90% may also effect a squeeze-out through a long-form merger requiring a shareholder vote. Such a transaction must comply with Delaware’s entire fairness standard, requiring the controlling shareholder to demonstrate that the transaction is entirely fair in both process and price. To obtain review under the more lenient business judgment rule, the transaction may be structured with approval by a committee of independent directors and/or a non-waivable majority-of-theminority shareholder vote.

The SEC’s Division of Corporation Finance selectively reviews filings made under the Securities Act and the Exchange Act to monitor and enhance compliance with applicable disclosure and accounting requirements. In its filing reviews, the SEC focuses on critical disclosures that appear to conflict with SEC rules or applicable accounting standards and on disclosure that appears to be materially deficient in explanation or clarity. The SEC does not evaluate the merits of any transaction or determine whether an investment is appropriate for any investor.

Sarbanes-Oxley requires the SEC to undertake some level of review of each reporting company at least once every three years. This includes a review of the company’s annual reports and annual proxy statements. In addition, the SEC selectively reviews transactional filings — the documents companies file when they engage in public offerings, business combination transactions, and proxy solicitations. For example, when a company seeks shareholder approval of certain transactions (such as mergers, sales of substantially all assets, or the amendment to an issuer’s constituent documents), the company must file a preliminary proxy statement and wait at least 10 days for SEC review prior to the use of a definitive proxy statement. When a company files a new registration statement for an offering, it cannot conduct the offering until confirming that the SEC will not review (or that the offering is not subject to further review, if the SEC has reviewed and issued comments).

If the SEC reviews a filing, the review may be a full cover-to-cover review in which the staff will examine the entire filing for compliance with applicable accounting standards and disclosure requirements, or may be a more limited or targeted review. Any SEC review and comment must be resolved before the offering or other transaction may proceed.

United States federal securities regulation does not necessarily prevent related party transactions. Rather, that regime is disclosure-oriented and most such regulation relates to the content and timing of required disclosure rather than merit-based standards of fairness or advice. For domestic issuers, Item 404(a) of Regulation S-K sets forth the standards for disclosure of related person transactions.

Item 404(a) requires that a company provide detailed disclosure in certain Exchange Act filings (including the annual report and proxy statement) and in Securities Act registration statements regarding any transaction in which a related person (i.e., any director, director nominee, executive officer, 5% security holder, or immediate family member) had or will have a direct or indirect material interest if the amount involved exceeds $120,000. The information required to be disclosed includes the name of the related person and their relationship with the company, the related person’s interest in the transaction (including the dollar value of their interest), and the approximate dollar value of the transaction, among other information. While the disclosure requirements are slightly different for FPIs, many look to the same requirements under the domestic issuer regulation regime.

In addition, SEC Regulation S-X, Rule 1-02(u) provides an additional source of disclosure with a separate definition of “related party” triggering financial disclosure that aligns with U.S. GAAP, which will require related party disclosure on a separate basis.

Any shareholder that acquires beneficial ownership of more than 5% of any registered class of equity securities must file reports disclosing their ownership of, and transactions in, the company’s securities under Section 13 of the Exchange Act. Those 5% holders who acquire securities with the purpose or effect of changing or influencing the control of the issuer must file a long-form Schedule 13D with the SEC containing detailed disclosure as to the holder, transactions in the issuer’s securities (including the timing and prices thereof), and agreements (which must be filed as exhibits) relating to such ownership. The Schedule 13D must be amended within 2 business days to report any material change in the information provided, including any acquisition or disposition of 1% or more of the registered class of equity securities. 5% holders who are passive investors, or who acquire securities in the ordinary course of business, or who qualify for certain other exemptions, can file short-form reports on Schedule 13G. Schedule 13G requires much less information, and amendments generally are due by the 45th day after the end of each calendar quarter. Section 13 applies in full to all persons regardless of the nationality or residence of the holder and regardless of the United States or FPI status of the issuer.

Additionally, directors, officers, and beneficial owners of more than 10% of the shares of a public company must file reports disclosing their ownership of, and transactions in, the company’s securities under Section 16 of the Exchange Act. This disclosure is designed to facilitate enforcement against those holders who may have a so-called “short-swing profit,” which is any deemed profit computed by matching any sale with any purchase within six months of each other (regardless of which transaction happened first and calculated to maximize the short-swing profit). The owner is required, on a no-fault basis, to disgorge 100% of all short-swing profit to the issuer, net of significant plaintiff counsel fees that incentivize lawyers to monitor filings and bring claims on behalf of all shareholders. The initial Section 16 ownership filing is made on Form 3 within ten days of becoming a reporting person, and then each amendment must be filed within two business days after each further purchase or sale. Section 16, including the filing requirements and the profit disgorgement, does not apply with respect to owners of the securities of FPIs.

As noted above, federal securities laws, as a disclosure-based regime, do not require shareholder approvals. Those requirements typically are a matter of state law and the rules of NYSE and Nasdaq. The listing requirements for NYSE and Nasdaq require shareholder approval of the following transactions:

Stock exchange rules require a minimum number of independent directors on the boards of listed companies. Additionally, Rule 10A-3 of the Exchange Act requires independent directors to comprise the audit committee of the board of directors.

A director is independent under Nasdaq rules if the director is not an executive officer or an employee of the company and, in the opinion of the board of directors, the director does not have a relationship that would interfere with exercising independent judgment in carrying out a director’s responsibilities. The board of directors must affirmatively decide whether each director meets this definition.

A director is not independent under Nasdaq rules if: (1) the director is, or was at any time during the past three years, employed by the company; (2) a family member of the director is or was during the past three years an executive officer of the company; (3) the director or a family member of the director received more than $120,000 in compensation from the company in any 12-month period in the past three years (excluding director and committee fees, payments under a tax-qualified retirement plan, or compensation of a non-executive officer family member); (4) the director or a family member of the director is, or was during the past three years, a controlling stockholder, partner, or executive officer of another entity that makes payments to or receives payments from the listed company exceeding the greater of $200,000 or 5% of that entity’s consolidated gross revenues; (5) the director or family member is an executive officer of a charitable organization receiving contributions from the company exceeding $200,000 or 5% of the charity’s revenues; (6) the director or a family member of the director is an executive officer of another company where any of the listed company’s executive officers are or were during the past three years members of the compensation committee of that other company; or (7) the director or a family member of the director is a current partner of the company’s auditor, or was within the past three years a partner or employee of the company’s auditor and worked on the company’s audit.

A director is independent under NYSE rules if the board of directors has evaluated and determined that the director has no material relationship with the company. A director is not considered independent under NYSE rules if: (1) the director is, or has been within the past three years, an employee of the company, or an immediate family member of the director is, or has been within the past three years, an executive officer of the company; (2) the director has received, or an immediate family member has received, within the past three years, more than $120,000 in any 12-month period in compensation from the company (excluding director and committee fees, pension or deferred compensation for prior service, or compensation of a non-executive officer family member); (3) the director is a current partner or employee of the company’s auditor, an immediate family member of the director is a current partner of the auditor or a current employee working on the company’s audit, or the director or a family member was within the past three years a partner or employee of the auditor who worked on the company’s audit; (4) the director or an immediate family member of the director is, or was within the past three years, an executive officer of another company where any of the listed company’s current executive officers are, or were during the past three years, members of the compensation committee of that other company; or (5) the director is a current employee, or an immediate family member of the director is currently an executive officer, of another company that makes payments to or receives payments from the listed company exceeding the greater of $1 million or 2% of that other company’s consolidated gross revenues in any one of the past three fiscal years.

A director is not independent under Rule 10A-3 if: (1) the director accepts, directly or indirectly, any consulting, advisory, or other compensatory fees from the company (other than director or committee fees, fixed payments under a retirement plan for prior service, or payments received as a stockholder of the company); or (2) the director is an affiliate of the company or any of its subsidiaries.

The following table summarizes the board and committee composition requirements:

Registration statements for public offerings in the United States must include audited annual financial statements and unaudited interim financial statements. The specific financial statement requirements depend on whether the issuer is an emerging growth company (“EGC”), whether it is a domestic issuer or an FPI, and whether the offering is an IPO.

EGCs are smaller issuers that are eligible to provide less rigorous disclosure in Securities Act and Exchange Act filings, along with other accommodations. A company that has not previously sold common equity securities in the U.S. under a registration statement will qualify as an EGC if it has total annual gross revenue of less than $1.235 billion during its most recently completed fiscal year. Once a company qualifies as an EGC, it will continue to be an EGC until the earlier of: (i) the fifth anniversary of the completion of its IPO; (ii) the last day of the fiscal year in which its annual gross revenues are $1.235 billion or more; (iii) the last day of the fiscal year in which the company is deemed to be a large accelerated filer (i.e., the market value of its common equity held by nonaffiliates exceeds $700 million as of the end of its second fiscal quarter); or (iv) the date on which it has issued more than $1 billion in non-convertible debt during the prior three-year period.

Domestic Issuer Financial Statement Requirements:

Foreign Private Issuer Financial Statement Requirements:

Audited financial statements must be accompanied by an audit report issued by independent public accountants that are registered with the PCAOB under standards promulgated by the PCAOB. Unaudited interim financial statements must be reviewed by a PCAOB registered auditing firm under PCAOB standards; however, FPIs are encouraged, but not required, to have any interim financial statements reviewed by an independent auditor.

U.S. domiciled companies must file financial statements in accordance with U.S. GAAP. The financial statements of FPIs may be prepared using U.S. GAAP, IASB IFRS, or local GAAP. In the case of FPIs using IASB IFRS, no reconciliation to U.S. GAAP is needed. If non-IASB IFRS or local GAAP is used, a note to the consolidated financial statements must include a reconciliation to U.S. GAAP.

Typically, a registration statement must include the financial statements described above as of the date of filing, provided that EGCs registering with the SEC for the first time may omit any annual and interim period which the issuer reasonably believes will not be required at the time of the offering. Even if compliant at the time of filing, during the SEC review process such financial statements may become stale. Registration statements may not be filed, or declared effective, with financial statements that have become stale.

For domestic companies, in general, the most recent balance sheet date in a registration statement must not be dated more than 134 days before the effective date of the registration statement (129 days for a company whose Form 10-Q is due at such time), except that third-quarter data is timely through the 45th day after the most recent fiscal year-end. After the 45th day, audited financial statements for the most recent fiscal year must be included in the registration statement.

For FPIs, in general, the last year of audited financial statements cannot be more than 15 months old at the time of the offering. This means that an issuer with a December 31 fiscal year end must have its registration statement declared effective before March 31. However, in connection with an IPO, the audited financial statements cannot be more than 12 months old at the time of the offering, meaning that an issuer with a December 31 fiscal year end must have its registration statement declared effective before January 1, unless the issuer is already public in another jurisdiction. Additionally, if the registration statement is declared effective more than 9 months after the end of the last audited fiscal year, the registration statement must include unaudited interim financial statements.

Additional audited and unaudited financial statements of a target company may be required if the issuer has recently completed a significant acquisition or if it is probable that a significant acquisition will be completed, along with pro forma financial information of the combined company.

There are no overarching laws that specifically regulate ESG in the U.S. However, there are several broad categories of existing ESG-related regulations. This discussion relates to U.S. domestic companies only. Different considerations may apply to FPIs.

Dodd-Frank and related SEC rules require public companies to make disclosures about: conflict minerals; the ratio between a company’s median annual compensation of all employees and the CEO’s annual compensation; the relationship between executive compensation and financial performance; and payments to the U.S. federal government or foreign governments if the company’s business involves the commercial development of oil, natural gas, or minerals (i.e., resource extraction).

SEC rules also require public companies to make disclosures about: whether they consider diversity as a factor in identifying board of director candidates and, if so, how; human capital resources, including measures and objectives that address the attraction, development, and retention of employees, if material to an understanding of the company’s business; and cybersecurity risk management, strategy, governance, and material incidents.

Climate Disclosure Rules

In March 2024, the SEC adopted new rules to enhance and standardize disclosure regarding climaterelated risks, requiring public companies to disclose climate-related information in registration statements and periodic reports. The final rules were immediately challenged in court, and in April 2024, the SEC issued an order staying the final rules pending the completion of the judicial review.

In March 2025, the SEC voted to end its defense of the climate-related disclosure rules and informed the court that its counsel is no longer authorized to advance the arguments in the brief filed by the previous SEC administration. On April 4, 2025, intervenor states filed a motion to hold the litigation in abeyance until the SEC determines whether it will amend or rescind the climate-related disclosure rules through notice-and-comment rulemaking. On April 28, 2025, the 8th Circuit Court of Appeals granted the motion to hold the cases in abeyance. The order directs the SEC to notify the court within

90 days whether it intends to review or reconsider the climate disclosure rules. On May 26, 2026, the SEC formally proposed the rescission of the climate disclosure rules, citing a lack of statutory authority as well as compelling policy reasons against such rules. The 60-day public comment period is currently ongoing.

Board Diversity

Beginning in 2022, Nasdaq listing rules required all Nasdaq-listed companies to publicly disclose board diversity data using a standardized disclosure matrix template, and beginning in 2024, companies were required to have, or explain why they did not have, at least one diverse director. On December 11, 2024, the United States Court of Appeals for the Fifth Circuit, in a 9-8 vote, struck down Nasdaq’s board diversity rules, holding that the SEC exceeded its statutory authority when it approved the rules. As a result of the ruling, effective immediately, public companies no longer need to comply with Nasdaq’s board diversity rule requirements. Following the ruling, proxy advisory firms ISS and Glass Lewis, and institutional investors including Vanguard and BlackRock, reviewed and updated their proxy voting policies relating to diversity. ISS will not consider board diversity as a factor in making voting recommendations. In contrast, Glass Lewis maintained its existing board diversity standards but will flag to investors which vote recommendations incorporate board diversity considerations. Vanguard will consider board composition but no longer includes personal characteristics within that consideration. BlackRock’s consideration of board composition will also no longer include personal characteristics, with the caveat that for S&P 500 companies BlackRock may consider whether the board is a “sustained outlier” with respect to board composition including with respect to personal characteristics.

In 2018, California required any public company with its principal executive offices located in the State of California to have a minimum of two diverse directors if the company has five directors, or a minimum of three diverse directors if the company has six or more directors. In 2022, the Los Angeles County Superior Court held that the diversity requirement violated the equal protection clause of California’s Constitution. In 2023, the U.S. District Court for the Eastern District of California held that the state’s diversity requirement was an unconstitutional racial quota in violation of the equal protection clause of the Fourteenth Amendment of the U.S. Constitution.

Washington State requires that women comprise at least 25% of the board of directors for at least 270 days of the fiscal year preceding the annual meeting of shareholders of public companies subject to the Washington Business Corporations Act, or that the company provide a board diversity discussion and analysis in its annual proxy statement or primary website. Other states, including New York, Illinois, and Maryland, have enacted laws requiring companies doing business in the respective state to report their board diversity information to the state.

A “trust” structure where a special purpose trust is set up to issue the securities is not common in the United States. Instead, in distributed transactions, a “trustee” is appointed to sign the indenture pursuant to which the debt securities are issued, hold the notes as custodian for the investors, and take certain actions pursuant to the terms of such indenture on behalf of such investors. Pursuant to the Trust Indenture Act of 1939 (the “TIA”), a trust indenture is required where the debt is registered with the SEC. Where debt is not registered, no such trust is required, but a trustee is similarly appointed.

The TIA to a great extent coordinates with the provisions of the Securities Act to protect the rights of the debt holders, impose minimum obligations and duties on trustees and obligors, and confer on the trustee the powers and resources needed to meet obligations to investors. The appointed trustee must be qualified by the SEC as complying with the requirements of the TIA.

The trustee is an independent agent having the established resources, facilities, and qualified staffing to manage and administer widely held debt issuances. Most trustee services are administrative in nature where the trustee avoids substantive decision-making responsibility. Often a trustee is a banking institution with corporate trust services. Trustees have fiduciary duties and contractual obligations.

A trustee also customarily acts in a variety of roles in connection with the offering, including: as a paying agent, receiving payments from the issuer and distributing them to the debt holders; as a transfer agent or registrar, maintaining the books and records of the various debt holders; and where debt is secured, as the collateral agent for purposes of perfecting security interests.

The trustee’s obligations typically include: receiving notices from the issuer and providing such notices to the debt holders; in case of the occurrence of an event of default, upon instruction from the requisite holders, exercising remedies against the collateral; and taking such other actions as required or where authorized by the requisite vote of a specified percentage of such holders, including accelerating the debt where appropriate in accordance with the indenture.

Credit enhancements are often used in debt offerings in the United States. Which credit enhancements, if any, are used in a particular offering is based on the creditworthiness of the issuer (including the applicable rating), the nature and industry of the issuer, the form and substance of the debt security (e.g., unsecured, asset-backed, guaranteed, collateralized debt obligations, etc.), the desired pricing of the debt securities, investor expectations, and other marketing considerations. Such credit enhancements may include parent and/or subsidiary guarantees, security interests in certain assets, priority of payment ranking (e.g., senior vs. subordinated status), and reserve accounts (money set aside to ensure payments and/or other operational needs). Certain credit enhancements are more common only in project and structured finance transactions; others, such as guarantees, security interests, and ranking, are more widely utilized in corporate debt offerings. Keep-well deeds are not common in debt financings, except on occasion in small offerings or specialized asset-based transactions.

The most common corporate debt offering credit enhancements include: guarantees, where the issuer’s parent company and/or its material subsidiaries contractually commit to pay the issuer’s obligations under the debt securities; collateral, where the issuer’s and guarantors’ obligations are secured by certain of their respective assets, allowing debt holders to enforce against such collateral to ensure payment on the debt securities following an event of default; and ranking, where the holders of other debt (subordinated debt) contractually agree to be paid after the debt securities (senior debt).

Note that with collateral, the security interest must be “perfected” as described in the Uniform Commercial Code to ensure the debt holders’ priority in the collateral as against other creditors. Such perfection is a local law matter requiring local filings that put other creditors on notice as to that security interest and priority.

The submission of a debt structure to a rating agency is a critical event in the debt offering process. Rating agencies scrutinize the creditworthiness of the issuer, including any guarantees, collateral, and ranking provisions.

Restrictive covenants vary based on the facts and circumstances of the issuer, the credit enhancements, the debt instrument, and the target investor market. Restrictive covenants serve to limit certain actions of the obligors and their respective “restricted” subsidiaries during the tenor of the debt securities. Restricted subsidiaries normally are all the subsidiaries of the obligors other than certain subsidiaries designated by the issuer as “unrestricted.” The metrics of “unrestricted” subsidiaries are not included in calculating certain key financial ratios and baskets contained in restricted covenants. As the name suggests, there are typically no restrictions on what an “unrestricted” subsidiary can do, though there are limitations on actions that obligors and restricted subsidiaries can take with respect to “unrestricted” subsidiaries.

Covenants in corporate debt securities are customarily “incurrence based” (meaning that they do not apply unless and until the company wants to take a specified action) and not “maintenance covenants” as would be the case in loan financings, project financings, or securitization transactions. Furthermore, debt securities that have an “investment grade” rating often have only a few basic restrictive covenants, such as a limitation on liens and limitation on sale-leaseback transactions. Debt securities that have “high yield” (i.e., lower credit) ratings contain a customized package of restrictive covenants based on many factors, especially the industry of the issuer. Below is a description of certain of the primary restrictive covenants in an issuance of “high yield” debt securities:

• Restricted Payments. A restricted payments covenant limits the amount of cash and other assets that are allowed to exit the credit package supporting the debt. Such restricted payments include cash distributions, such as dividends, equity repurchases, subordinated debt redemptions prior to maturity, and prohibited investments by the restricted subsidiary.
• Limitation on Affiliate Transactions. This covenant restricts the restricted entities from engaging in transactions with affiliates unless those transactions are on terms no less favorable than would be available in similar transactions with unrelated third parties.
• Limitations on Indebtedness. This covenant limits the type and amount of debt the restricted entities may incur. These limitations may be in the form of a limit on the amount of additional debt that may be incurred based on a ratio, which is usually a fixed charge ratio of EBITDA for the last four fiscal quarters to fixed charges, including interest and certain dividends of restricted subsidiaries.
• Limitation on Asset Sales. While this covenant does not prohibit asset sales, it requires the restricted entities to use the proceeds of the asset sales in one or more specified manners during a specified period, which includes prepayment of certain debt or reinvestment in the business. Where such proceeds are not so deployed in the specified period, the issuer is required to offer the debt holders to have their debt securities repurchased at par, rather than otherwise using those proceeds for general corporate purposes.
• Limitation on Liens. This covenant, which is usually coordinated to the indebtedness limitation covenant, limits how much debt of the restricted entities can be secured. For unsecured debt securities, this covenant would require the unsecured debt securities to be secured on a pari passu basis if the restricted entities incurred otherwise unpermitted secured debt.
• Future Guarantors. This covenant requires that if a restricted entity incurs debt in excess of a specified amount, it would be required to also guarantee the debt securities. This covenant is included to ensure that any structural subordination is limited.

There are several other restrictive covenants that are included in “high yield” transactions, and each of them, including those listed above, have various exceptions and carve-outs (“baskets”) that are carefully negotiated.

Most debt securities require the obligors to “gross-up” any applicable withholding tax that is applicable to any payment by an obligor to the debt holders.

Non-convertible bonds may be listed on Nasdaq (on the Nasdaq Global Market or, if the issuer’s primary equity security is listed on the Nasdaq Global Select Market, then on the Nasdaq Global Select Market) and on NYSE. The initial and continued listing requirements for listing non-convertible bonds on Nasdaq and NYSE are substantially similar:

Initial Listing Requirements:

Continued Listing Requirements:

If a Nasdaq-listed non-convertible bond fails to meet the public float requirement for continued listing for a period of 30 consecutive business days, Nasdaq will notify the issuer and the issuer will have 180 days to regain compliance. Compliance can be achieved during this period by meeting the applicable standard for a minimum of 10 consecutive business days, unless Nasdaq exercises its discretion to extend this period. However, failure by an issuer to meet its obligations on the debt, as determined by Nasdaq, would result in immediate suspension and the commencement of delisting proceedings.

The NYSE does not provide a cure period for non-compliance with continued listing requirements for NYSE-listed non-convertible bonds. If the continued listing requirements are not met, the NYSE will promptly initiate suspension and delisting procedures.

Foreign Private Issuer Status

A foreign issuer seeking to access the U.S. capital markets may qualify as a “foreign private issuer”

(“FPI”) under Rule 3b-4 under the Exchange Act. Generally, a company organized outside the United

States qualifies as an FPI unless: (i) more than 50% of its outstanding voting securities are held by U.S. residents; and (ii) a majority of the company’s executive officers or directors are U.S. citizens or residents, the majority of its assets are located in the United States, or the company’s business is principally administered in the United States. FPI status is tested annually on the last business day of the second fiscal quarter.

Registration and Offering

A foreign issuer that qualifies as an FPI and wishes to conduct a registered public offering of equity securities in the United States files a Form F-1 registration statement (for an IPO) or Form F-3 (for subsequent shelf offerings, once eligible). FPIs that do not yet qualify for Form F-3 shelf eligibility may conduct follow-on offerings on Form F-1. Registration statements for FPIs are subject to SEC review in the same manner as those of domestic issuers; however, FPIs enjoy certain accommodations in terms of the content of those filings.

Key Differences — Disclosure Obligations

FPIs file their annual reports on Form 20-F (rather than Form 10-K) and are permitted to prepare financial statements in accordance with IASB IFRS without reconciliation to U.S. GAAP (or in U.S. GAAP). FPIs are not required to comply with the detailed financial statement requirements applicable to domestic issuers under Regulation S-K and Regulation S-X in all respects, and may follow their home country’s disclosure practices for certain items such as management’s discussion and analysis, executive compensation disclosure, and related party transactions, subject to certain baseline requirements.

FPIs are not required to file quarterly reports on Form 10-Q but must furnish on Form 6-K any information that they (i) make or are required to make public pursuant to the laws of their home country; (ii) file or are required to file with a stock exchange on which their securities are listed; or (iii) distribute or are required to distribute to their security holders. FPIs must file annual reports on Form 20-F within four months after the end of their fiscal year.

Key Differences — Corporate Governance

FPIs may follow their home country’s corporate governance practices in lieu of most of the NYSE and Nasdaq corporate governance listing standards (other than the requirement to have a fully independent audit committee compliant with Rule 10A-3). This means that FPIs are generally not required to have a majority independent board, an independent compensation committee, or an independent nominating and corporate governance committee, subject to certain disclosure requirements about the home country practices they follow in lieu of these requirements.

Key Differences — Section 16 and Short-Swing Profit

As noted in Question 16, Section 16 of the Exchange Act — including the short-swing profit disgorgement provisions — does not apply to FPIs.

FPI Concept Release

On June 4, 2025, the SEC published a concept release soliciting public comment on whether the accommodations afforded to FPIs should continue to apply to the foreign issuers currently captured in the definition of “foreign private issuer,” or whether the definition should be amended or the regime altered. The public comment period remains open for 90 days. The issuance of the concept release does not necessarily mean that the SEC will ultimately propose new rules.

On February 27, 2026, the SEC adopted a final rule requiring directors and officers of FPIs to comply with the reporting obligations of Section 16(a) of the Exchange Act. The reporting requirements do not apply to beneficial owners of more than 10 percent of outstanding shares. In addition, directors and officers of FPIs are still exempt from short-swing profit liability under Section 16(b) and the short selling prohibition under Section 16(c).

Public markets remain a meaningful — but increasingly selective — exit strategy for private equity (“PE”) investors in the United States. The PE industry has accumulated a record backlog of portfolio companies awaiting exit, driven by several years of depressed IPO volumes in 2022 and 2023 following the post-pandemic valuation reset. This backlog has created significant pressure on PE sponsors to achieve liquidity for their limited partners, and the IPO market has been a primary destination for that liquidity.

IPO as a PE Exit

The traditional IPO remains the most high-profile exit route for PE-backed companies. A successful IPO can generate significant value for a PE sponsor, particularly where the offering is structured to include a meaningful secondary component allowing the sponsor to sell a portion of its position at the time of the IPO. However, U.S. exchanges and institutional investors generally expect that a meaningful majority of IPO proceeds will be primary (going to the company) rather than secondary (going to the selling shareholder), which limits the immediate liquidity available to the sponsor. Lockup agreements — typically 180 days — further restrict the sponsor’s ability to sell shares immediately following the IPO.

Post-IPO follow-on offerings and registered secondary block trades have historically provided PE sponsors with their primary mechanism to monetize their remaining position following the lock-up expiration. The depth and liquidity of the U.S. equity markets make this a viable pathway for sponsors in well-performing portfolio companies.

Alternative Exit Mechanisms

Where IPO market conditions have been unfavorable — as was the case in 2022 and 2023 — PE sponsors have relied more heavily on alternative exit routes, including:

• Strategic M&A. Sales to strategic buyers remain the most common PE exit route by volume, and strategic M&A activity in the U.S. has remained robust through 2025, albeit subject to heightened antitrust scrutiny under recent administrations.
• Secondary PE sales. Sales of PE-backed companies from one PE sponsor to another (socalled “sponsor-to-sponsor” transactions) have become a significant exit mechanism, particularly for companies that are not yet ready for a public offering.
• Continuation vehicles. GP-led continuation fund transactions — where the PE manager rolls a portfolio company into a new continuation vehicle, offering existing limited partners the option to cash out or roll over — have become an increasingly important mechanism for PE sponsors to provide liquidity while retaining ownership of high-performing assets.
• De-SPAC transactions. As noted in Question 9, de-SPAC transactions have offered an alternative path to public markets for PE-backed companies, providing some of the liquidity benefits of a traditional IPO while offering greater certainty of closing, a longer marketing period, and the ability to include earnout provisions to bridge valuation gaps.

Outlook

The public markets are expected to remain a viable — and increasingly active — exit route for PE investors in 2026, particularly as the backlog of sponsor-backed companies seeking liquidity continues to build and as market conditions stabilize. However, investors’ selectivity has increased materially since the 2021 SPAC and IPO boom: companies coming to the public markets in 2026 will need to demonstrate clear paths to profitability, strong governance, and compelling growth stories to achieve successful outcomes.

The regulatory direction in the U.S. capital markets is currently mixed, with competing trends toward both deregulation and targeted expansion of oversight, largely reflecting the change in administration and SEC leadership in January 2025.

Deregulatory Trends

The Trump administration’s SEC, under new leadership, has taken a markedly more deregulatory posture since early 2025:

• Withdrawal from climate disclosure rules. As described in Question 20, the SEC has effectively abandoned its defense of the 2024 climate-related disclosure rules and is widely expected to formally rescind or materially narrow those rules through rulemaking.
• Crypto industry engagement. The SEC has dismissed many enforcement actions previously brought against crypto companies and has signaled a more permissive approach to digital assets, consistent with the administration’s stated goal of making the United States the leading jurisdiction for digital asset activity (discussed further in Question 29).
• Reduction of enforcement activity in certain areas. The SEC’s enforcement posture has shifted, with indications that the agency is de-prioritizing certain categories of enforcement, particularly those relating to ESG and digital asset matters.
• Revisiting the FPI framework. The June 2025 FPI concept release signals that the SEC is open to rethinking the accommodations provided to foreign issuers, potentially expanding or modifying the existing framework to better reflect current market conditions and cross-border capital flows.

Areas of Continued or Expanded Oversight

Notwithstanding the broader deregulatory trend, certain areas continue to attract regulatory attention:

• Cybersecurity disclosure. The SEC’s cybersecurity disclosure rules, adopted in 2023, remain in effect and continue to require public companies to disclose material cybersecurity incidents within four business days and to include cybersecurity risk management and governance disclosures in annual reports.
• SPAC regulation. The January 2024 SPAC rules — which significantly expanded disclosure requirements for SPAC IPOs and de-SPAC transactions — remain in effect and have been integrated into market practice.
• AI and technology disclosures. The SEC has signaled interest in how public companies disclose risks associated with artificial intelligence and other emerging technologies, and further guidance or rulemaking in this area is possible.
• Exchange governance. NYSE and Nasdaq continue to refine and update their listing standards, and the SEC continues to exercise oversight of those standards.

Overall Assessment

The prevailing trend in the current regulatory environment is toward deregulation and simplification of certain compliance burdens, particularly in the areas of ESG, digital assets, and enforcement. However, issuers, underwriters, and market participants should monitor developments closely, as the regulatory landscape is evolving rapidly and certain pockets of expanded oversight — particularly in cybersecurity, AI-related disclosures, and SPAC transactions — remain active.

Yes. The regulation of crypto assets in the United States has undergone a significant shift in direction since early 2025, and an active regulatory framework for digital assets is emerging across multiple fronts.

SEC Enforcement Posture

The prior SEC administration pursued aggressive enforcement against many crypto companies, alleging that a wide range of digital tokens and related products constituted securities subject to SEC registration and oversight. Under new leadership beginning in January 2025, the SEC has materially changed course: it has dismissed many of those enforcement actions, announced the closure of several crypto-related investigations, and established a dedicated Crypto Task Force to develop a more coherent regulatory framework for digital assets.  On January 28, 2026, the SEC issued a statement identifying various models of tokenized securities and clarifying that they will be treated the same as traditional securities for the purposes of the federal securities laws. In addition, both NASDAQ and NYSE have introduced proposals to allow trading of certain digital assets.

Presidential Priority

President Trump has explicitly prioritized making the United States the leading global hub for digital asset activity. In March 2025, President Trump stated his intention to make America the “Bitcoin superpower of the world and the crypto capital of the planet.” This political commitment has created significant momentum for regulatory clarity in the crypto space.

Stablecoin Legislation

Congressional efforts to enact a stablecoin regulatory framework gained significant momentum in 2025. Proposed legislation has sought to create a licensing regime for stablecoin issuers — potentially under the oversight of either federal banking regulators or the Federal Reserve — establishing requirements for reserves, redemption rights, and consumer protections. On July 18, 2025, President Trump signed the GENIUS Act into law, setting up a regulatory framework that will take effect throughout a multi-year period. The passage of stablecoin legislation represents a significant milestone in the development of a formal U.S. regulatory framework for digital assets and reduces the legal uncertainty that has historically inhibited institutional participation in the stablecoin market.

Market Structure Legislation

In parallel with stablecoin legislation, Congress has also been working on broader digital asset market structure legislation that would more clearly define the jurisdictional boundary between the SEC and the CFTC with respect to digital assets, and would establish a registration and disclosure regime for digital asset exchanges and intermediaries. While the legislative process remains ongoing, the bipartisan momentum behind these efforts is meaningful and represents a departure from the prior environment, in which many market participants operated under significant legal uncertainty.

Capital Markets Impact

The developing regulatory framework for digital assets has already begun to attract crypto-native and blockchain-adjacent companies to the U.S. public capital markets. As described in Question 9, several cryptocurrency companies completed IPOs or are preparing to go public in 2025 and 2026. The clarity provided by a statutory framework — if and when enacted — is expected to accelerate this trend materially.

Any views expressed in this publication are strictly those of the authors and should not be attributed in any way to White & Case LLP.