SEC Commissioners Aim to Reduce Burdens on Small Issuers

In separate remarks to the Small Business Capital Formation Advisory Committee, SEC Acting Chair Mark T. Uyeda and Commissioner Hester M. Peirce highlighted challenges faced by small public companies.

Mr. Uyeda said he tasked staff with "explor[ing] ways to improve capital-raising opportunities for entrepreneurs and to empower retail investment in private companies." He raised concerns about the lack of tailored disclosure for smaller issuers as it imposes "disproportionate compliance burdens and create barriers to entry." He proposed scale disclosure requirements for smaller issuers and increased eligibility for smaller issuers to use shelf registration statements. He asserted that small issuers have a need, greater than big issuers, to quickly access the capital markets when timing and other conditions are right.

SEC Commissioner Hester M. Peirce asked the Committee to consider the following questions:

• What are the biggest obstacles preventing private companies from going public?
• What costs imposed on a newly public company could the SEC reduce or eliminate without hurting investors?
• How can the SEC improve the treatment of smaller public companies and companies not listed on the stock exchange?

Ms. Peirce encouraged recommendations to "help the Commission identify regulatory hurdles that are impeding emerging fund managers and small public companies."