Van Hollen Joins Budd, Warnock, Colleagues in Introducing Bipartisan Bill to Reduce Regulatory Risks for Companies to Sell Public Shares & Strengthen U.S. Financial Markets

Today, U.S. Senator Chirs Van Hollen (D-Md.) joined Senator Ted Budd (R-N.C.), Reverend Raphael Warnock (D-Ga.), and several of their colleagues in introducing the Encouraging Public Offerings Act to limit regulatory risk that holds companies back from engaging with the U.S. Securities and Exchange Commission (SEC) in the Initial Public Offering (IPO) process. The bipartisan legislation would codify existing SEC rules and make the initial IPO registration process more confidential and less burdensome, thereby reducing the regulatory risk of going public and encouraging companies to do so sooner. In addition to Senators Van Hollen, Budd, and Warnock, this legislation is cosponsored by Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.). U.S. Representative Ann Wagner (R-Mo.-02) introduced companion legislation in the House of Representatives.

"Taking a company public can be complex and costly - especially for our small businesses. This bipartisan legislation provides companies the flexibility they need to grow and thrive. We must support new pathways for businesses - and the workers they employ - to grow, and this bill does exactly that," said Senator Van Hollen.

"Limiting regulatory risks for companies interested in going public is essential to keeping U.S. financial markets the best in the world. Far too many companies are unwilling to go public because regulatory barriers are too costly, complex, and time-consuming, making the IPO process less attractive. My bipartisan legislation with Senator Warnock will help restore the U.S. IPO market by codifying confidential registration rules and allowing companies to 'test the waters.' The aim here is to encourage more businesses to enter public markets and expand investment opportunities for Americans," said Senator Budd.

"This bipartisan legislation helps more businesses-especially small and growing businesses-access the public markets and capital they need to expand. That means more investment in Georgia, more Georgia jobs, and a stronger economy for our country. I'm proud to work with Senator Budd on this commonsense bill," said Senator Warnock.

"IPOs give companies crucial access to capital markets and drive economic growth. When private companies consider going public, we should be doing everything possible to make this process easy and to encourage it without jeopardizing investor protections. This bipartisan legislation will reduce unnecessary red-tape and encourage these companies to continue to grow," said Senator Tillis.

"Taking a company public can be complex and costly - especially for our small businesses. This bipartisan legislation provides companies the flexibility they need to grow and thrive. We must support new pathways for businesses - and the workers they employ - to grow, and this bill does exactly that," said Senator Van Hollen.

"It is in our country's best interest to make it easier for newer, smaller companies to access public markets - this spurs economic opportunity and unlocks the capital needed for companies to grow and thrive, providing more wealth-building opportunities for every day investors. Our Encouraging Public Offerings Act makes it simpler and safer for companies to register to go public by decreasing the regulatory risk burden. I look forward to continuing to work with Senator Budd to get this across the finish line," said Senator Alsobrooks.

"Main Street investors and their families need us to be focused on making life easier and more affordable for them. This is critical legislation that advances that goal by eliminating onerous requirements on growing businesses and supporting expanded growth in our local economies around the nation. The bipartisan Encouraging Public Offerings Act will help give the public more investment opportunities so they can buy into entrepreneurial businesses and better save for their family's future. I appreciated working with my friend Senator Budd on this vital issue and look forward to getting it signed into law," said Representative Wagner.

Background on the Encouraging Public Offerings Act:

The increased regulatory burden on companies looking to IPO has caused a severe decline in the U.S. IPO market since the early 2000s. Despite this downward trend, the public policy upsides of companies selling shares to the public are significant: the investing public gains access to savings and a wealth-creation opportunity, and the company gains access to capital to continue growing.

The Encouraging Public Offerings Act codifies the SEC administrative changes around confidential registrations into law. It further allows all issuers to "test the waters" prior to an IPO. "Testing the waters" refers to communications between a would-be issuer, accredited institutional buyers, and investors prior to an IPO to gauge interest in a potential security offering.

Full text of the legislation can be found here.