SEC Suggests Creation of Small-Business Exchange —Bloomberg

Exchange Would Make it Easier for Companies to Go Public in the U.S. But Would be Limited to Experienced Investors

Dave Michaels at Bloomberg reports that a Securities and Exchange Commission panel suggested that an exchange limited to small businesses should be created. The exchange would make it easier for companies to go public in the U.S. but would be limited to experienced investors better able to assess the risks involved with lower disclosure hurdles.  The Panel said the exchange should be limited to sophisticated investors, which it didn’t define.  More:

The U.S. Securities and Exchange Commission should urge the creation of a new stock exchange limited to small companies that have trouble raising capital in public markets, an agency panel recommended today.

The SEC Advisory Group on Small and Emerging Companies made the recommendation as its co-chairman suggested that a 2012 law intended to increase the number of initial public offerings might fail to have a big impact. The so-called Jumpstart Our Business Startups Act designed to induce more IPOs by reducing disclosure requirements and restrictions on how firms can advertise for investors.

“The JOBS Act, at least in my view, definitely did not do enough,” said Stephen M. Graham, the advisory group’s co- chairman and a partner who has represented emerging companies at Fenwick & West LLP in Seattle. “The main reason why companies don’t want to go public is liquidity in the stock,” as well as disclosure requirements.

SEC Says Experienced Investors Could Help Create Small-Business Exchange, Jump Start the Economy

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