SIFMA CEO Calls for Reforms to Reverse Decline in Public Company Listings

SIFMA's CEO argued that policymakers should pursue legislative and regulatory reforms to reverse a 25-year decline in public company listings and encourage more companies to go and remain public.

At a Senate Banking Committee hearing on capital formation, SIFMA President and CEO Kenneth E. Bentsen Jr. stated that the shrinking number of publicly listed companies limits opportunities for investors to participate in the growth of American businesses. Mr. Bentsen pointed to the JOBS Act as a successful model for expanding access to public markets while maintaining investor protections, and called on Congress and regulators to build on that framework.

He outlined reforms SIFMA supports, addressed both to the decline in listed companies and IPOs and to broader capital formation goals.

To streamline the IPO process and modernize the public offering framework, he advocated for:

• Senate action on the House-passed INVEST Act, and in particular its provision that would extend the JOBS Act testing-the-waters and confidential-draft-submission provisions to all issuers;
• the SEC's proposed Registered Offering Reform and Filer Status rules (see prior coverage), which SIFMA supports while urging targeted revisions (neither has been adopted); and
• expanded research coverage through Securities Act Rule 139 ("Publications or distributions of research reports") safe-harbor expansion in the Registered Offering Reform proposal and FINRA's modernization of Rule 2241 ("Research Analysts and Research Reports").

Separately, as additional measures to promote capital formation, he asked Congress to advance:

• retirement plan parity that gives 403(b) participants access to collective investment trusts and insurance company separate accounts already available to 401(k) savers and the Thrift Savings Plan;
• expanded retail access to private markets through closed-end funds investing in private funds;
• modernized fee and expense disclosure for funds that invest in business development companies, allowing them to exclude BDC operating expenses from their Acquired Fund Fees and Expenses; and
• electronic delivery as the default for investor communications, with investors able to choose paper.

Mr. Bentsen concluded that strengthening capital formation allows Main Street investors, retirement savers, and American workers to share in the wealth creation generated by capital markets.