[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 3980 Introduced in Senate (IS)]

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117th CONGRESS
  2d Session
                                S. 3980

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 offerings.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 31, 2022

   Ms. Lummis (for herself, Ms. Sinema, Mr. Warner, and Mr. Hagerty) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
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 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 Underwriting Cost 
Act''.

SEC. 2. STUDY ON IPO FEES.

    (a) Definitions.--In this section:
            (1) IPOs.--The term ``IPOs'' means initial public 
        offerings.
            (2) Small- and medium-sized companies.--The term ``small- 
        and medium-sized companies'' means issuers with an initial 
        public float determination of less than $700,000,000.
    (b) Study.--The Securities and Exchange Commission, in consultation 
with the Financial Industry Regulatory Authority, shall carry out a 
study of the costs associated with small- and medium-sized companies to 
undertake IPOs and Tier 2 offerings, as defined in section 230.251 of 
title 17, Code of Federal Regulations. In carrying out such study, the 
Commission shall--
            (1) consider the direct and indirect costs of an IPO, 
        including--
                    (A) fees, such as gross spreads paid to 
                underwriters, IPO advisors, and other professionals;
                    (B) compliance with Federal and State securities 
                laws at the time of the IPO; and
                    (C) such other IPO-related costs as the Commission 
                determines appropriate;
            (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 
        Commission determines is appropriate to analyze IPO pricing 
        practices, considering--
                    (A) the number of IPOs;
                    (B) how costs for IPOs have evolved over time, 
                including fees paid to 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 underwriting costs;
                    (E) changes in the costs and availability of 
                investment research for small- and medium-sized 
                companies; and
                    (F) any other consideration the Commission 
                considers necessary and appropriate.
    (c) 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 Congress containing all findings and determinations made in 
carrying out the study required under subsection (b) and any 
administrative or legislative recommendations the Commission may have.
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