Middle Market IPO Cost Act

IIB 118TH CONGRESS 1ST SESSION H. R. 2812 IN THE SENATE OF THE UNITED STATES JUNE 6, 2023 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To require the Securities and Exchange Commission to carry out a study of the costs associated with small- and medium-sized companies to undertake initial public offer- ings. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 00:52 Jun 07, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2812.RFS H2812 kjohnson on DSK79L0C42PROD with BILLS 2 HR 2812 RFS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Middle Market IPO 2 Cost Act’’. 3 SEC. 2. STUDY ON IPO FEES. 4 (a) STUDY.—The Comptroller General of the United 5 States, in consultation with the Securities and Exchange 6 Commission, in consultation with the Financial Industry 7 Regulatory Authority, shall carry out a study of the costs 8 associated with small- and medium-sized companies to un- 9 dertake initial public offerings (‘‘IPOs’’). In carrying out 10 such study, the Comptroller General shall— 11 (1) consider the direct and indirect costs of an 12 IPO, including— 13 (A) fees of accountants, underwriters, and 14 any other outside advisors with respect to the 15 IPO; 16 (B) compliance with Federal and State se- 17 curities laws at the time of the IPO; and 18 (C) such other IPO-related costs as the 19 Comptroller General may consider; 20 (2) compare and analyze the costs of an IPO 21 with the costs of obtaining alternative sources of fi- 22 nancing and of liquidity; 23 (3) consider the impact of such costs on capital 24 formation; 25 VerDate Sep 11 2014 00:52 Jun 07, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2812.RFS H2812 kjohnson on DSK79L0C42PROD with BILLS 3 HR 2812 RFS (4) analyze the impact of these costs on the 1 availability of public securities of small- and me- 2 dium-sized companies to retail investors; and 3 (5) analyze trends in IPOs over a time period 4 the Comptroller General determines is appropriate to 5 analyze IPO pricing practices, considering— 6 (A) the number of IPOs; 7 (B) how costs for IPOs have evolved over 8 time for underwriters, investment advisory 9 firms, and other professions for services in con- 10 nection with an IPO; 11 (C) the number of brokers and dealers ac- 12 tive in underwriting IPOs; 13 (D) the different types of services that un- 14 derwriters and related persons provide before 15 and after a small- or medium-sized company 16 IPO and the factors impacting IPOs costs; 17 (E) changes in the costs and availability of 18 investment research for small- and medium- 19 sized companies; and 20 (F) the impacts of litigation and its costs 21 on being a public company. 22 (b) REPORT.—Not later than the end of the 360-day 23 period beginning on the date of the enactment of this Act, 24 the Comptroller General shall issue a report to the Con- 25 VerDate Sep 11 2014 00:52 Jun 07, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2812.RFS H2812 kjohnson on DSK79L0C42PROD with BILLS 4 HR 2812 RFS gress containing all findings and determinations made in 1 carrying out the study required under subsection (a) and 2 any administrative or legislative recommendations the 3 Comptroller General may have. 4 Passed the House of Representatives June 5, 2023. Attest: CHERYL L. JOHNSON, Clerk. VerDate Sep 11 2014 00:52 Jun 07, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2812.RFS H2812 kjohnson on DSK79L0C42PROD with BILLS