Committee Recommendations For U.S. Public Equity Markets

The Committee on Capital Markets Regulation released a report setting forth certain recommendations that are intended to revive the public equity markets. The report cites certain statistics regarding equity capital markets activity, noting the decline in the volume of equity capital raised in IPOs and a decline in the number of U.S. IPOs, as well as a decline in the number of public companies in the United States. By contrast, the report notes that more capital is being raised through Regulation D offerings than through registered offerings and notes the rise in privately held companies valued over a $1 billion. The study attributes the decision to defer IPOs to excessive regulation, increased costs of being a U.S. public company, short-term investor focus, increased litigation risk, and the increasing value of securities related settlements. The Committee recommends that the Securities and Exchange Commission meet with private companies to understand the reason why