US Codex
Bill
Notes

H.R. 6324 — what changed

Middle Market IPO Underwriting Cost Act

From Introduced in House to Reported in House. 1 section amended between Introduced in House and Reported in House.

Sec. 2 Study on IPO fees

(a)
changed Study— The Securities and Exchange Commission, in consultation with the Financial Industry Regulatory Authority, shall carry out a study of the direct and indirect underwriting costs, including gross spreads costs associated with small- and pricing practices, for mid-sized medium-sized companies to undertake initial public offerings (“IPO”). (“IPOs”). In carrying out such study, the Commission shall—
(1)
changed compare underwriting fees in foreign countries to those in consider the United States;direct and indirect costs of an IPO, including—
(A)
added fees, such as gross spreads paid to underwriters, IPO advisors, and other professionals;
(B)
added compliance with Federal and State securities laws at the time of the IPO; and
(C)
added such other IPO-related costs as the Commission determines appropriate;
(2)
changed compare and analyze the relationship between costs of an IPO with the costs of taking a company public obtaining alternative sources of financing and the underwriting fees, including gross spreads;of liquidity;
(3)
changed compare consider the underwriting fees for larger company IPOs compared with mid-sized IPOs;impact of such costs on capital formation;
(4)
changed look at analyze the changes to underwriting fees, if any, between 1980 impact of these costs on the availability of public securities of small- and today; medium-sized companies to retail investors; and
(5)
changed consider—analyze trends in IPOs over a time period the Commission determines is appropriate to analyze IPO pricing practices, considering—
(A)
changed the reasons for any disparities identified under paragraphs (1) through (4);number of IPOs;
(B)
changed whether such how costs for IPOs have evolved over time, including fees limit capital formation paid to underwriters, investment advisory firms, and whether any such impact is reasonable;other professions for services in connection with an IPO;
(C)
changed how such fees may factor into a company’s decision to go public;the number of brokers and dealers active in underwriting IPOs;
(D)
changed alternatives to going public through the traditional underwriting process, such as directly listing with different types of services that underwriters and related persons provide before and after a national securities exchange small- or filing a Form 10; andmedium-sized company IPO and the factors impacting underwriting costs;
(E)
added changes in the costs and availability of investment research for small- and medium-sized companies; and
(F)
renumbered was (2)(7)(6) any other consideration the Commission considers necessary and appropriate.
(b)
Report— Not later than the end of the 360-day period beginning on the date of the enactment of this Act, the Commission shall issue a report to the Congress containing all findings and determinations made in carrying out the study required under subsection (a) and any administrative or legislative recommendations the Commission may have.