To require the Comptroller General of the United States to carry out a study of the costs associated with small- and medium-sized companies to undertake initial public offerings.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
Section 1. Short title
This Act may be cited as the Middle Market IPO Cost Act
.
Sec. 2. Study on IPO fees
(a) Study
The Comptroller General of the United States, in consultation with the Securities and Exchange Commission and the Financial Industry Regulatory Authority, shall carry out a study of the costs associated with small- and medium-sized companies to undertake initial public offerings (IPOs
). In carrying out such study, the Comptroller General shall—
(1)
consider the direct and indirect costs of an IPO, including—
(A)
fees of accountants, underwriters, and any other outside advisors with respect to the IPO;
(B)
compliance with Federal and State securities laws at the time of the IPO; and
(C)
such other IPO-related costs as the Comptroller General may consider;
(2)
compare and analyze the costs of an IPO with the costs of obtaining alternative sources of financing and of liquidity;
(3)
consider the impact of such costs on capital formation;
(4)
analyze the impact of these costs on the availability of public securities of small- and medium-sized companies to retail investors; and
(5)
analyze trends in IPOs over a time period the Comptroller General determines is appropriate to analyze IPO pricing practices, considering—
(A)
the number of IPOs;
(B)
how costs for IPOs have evolved over time for underwriters, investment advisory firms, and other professions for services in connection with an IPO;
(C)
the number of brokers and dealers active in underwriting IPOs;
(D)
the different types of services that underwriters and related persons provide before and after a small- or medium-sized company IPO and the factors impacting IPOs costs;
(E)
changes in the costs and availability of investment research for small- and medium-sized companies; and
(F)
the impacts of litigation and its costs on being a public company.
(b) Report
Not later than the end of the 360-day period beginning on the date of the enactment of this Act, the Comptroller General of the United States 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 Comptroller General may have.