A Push To Bring More Companies Public
The Securities and Exchange Commission has proposed two new rules aimed at making it easier for companies to go public. The agency described the move as the largest overhaul of IPO rules in 20 years.
The proposal is part of SEC chairman Paul Atkins’ broader effort to revive the US public listings market. Atkins has argued that excessive regulation and disclosure burdens have discouraged companies from entering public markets.
Fewer Companies Choose Public Markets
The number of companies going public has fallen significantly compared with the 1990s. In recent years, many of the most valuable and closely watched startups have chosen to remain private for longer.
One major reason is the abundance of private capital. Venture capital firms, private equity investors and other funding sources now allow companies to raise hundreds of millions of dollars without dealing with public filing requirements, investor scrutiny and heavier regulation.
Smaller Companies Could Benefit
The proposed rule changes are technical, but their impact could be meaningful. One part of the plan would make it easier for small companies to conduct shelf offerings, allowing them to raise money more efficiently after going public.
The SEC said this would represent the most significant modernization of the registered offering framework in more than two decades. The goal is to reduce friction for companies that need access to public capital but may lack the resources of larger corporations.
Disclosure Rules May Be Relaxed
The SEC also proposed easing disclosure requirements for smaller companies. Larger firms would receive at least a five-year transition period before having to comply with stricter disclosure obligations.
That change could benefit companies planning major listings, including SpaceX, which is expected to begin trading as a public company soon. Anticipated IPO candidates in artificial intelligence, such as Anthropic and OpenAI, could also gain from a more flexible reporting environment.
Atkins Wants To Reduce Listing Friction
Atkins has repeatedly argued that public markets have become less attractive because of costs, complexity and litigation risk. Earlier this year, the SEC also proposed replacing quarterly financial reporting with semi-annual disclosures.
Speaking at the Milken Institute Global Conference, Atkins said the aim is to make America attractive again for investment and to reduce the burden of public company compliance. He has also criticized shareholder proposals from special interest groups and called for limits on what he views as frivolous litigation.
A Debate Over How To Revive IPOs
In congressional testimony, Atkins noted that more than 7,800 companies were listed on US exchanges in the early 1990s. Last year, there were 374 IPOs, roughly in line with the average pace seen over much of the past 25 years.
Critics argue that easing rules may not be enough. Some say the SEC should instead make it harder for large private companies to avoid public registration, including by revisiting the shareholder threshold that was raised from 500 to 2,000 in 2012. For investors, the debate comes down to two competing approaches: make staying private harder, or make going public more attractive. The Trump-era SEC is clearly choosing the second path.
