America’s public markets were built on the promise that companies of all sizes could access capital to grow and that ordinary investors could participate in that growth on equal footing.For the first time in a generation, the Securities and Exchange Commission has recently proposed sweeping reforms to modernize public markets and fulfill that promise, and Congress is moving to reinforce them.These reforms would make capital formation more accessible for companies of all sizes, while ensuring investors have the information they need to make sound investment decisions.
Leveling the playing field
The SEC’s proposal to reform registered offerings, including its proposals to expand federal preemption over individual state laws, shares a common principle. The recognition that SEC-registered securities offerings are inherently national, must be fair and accessible, and give every investor the information needed to make informed decisions.Companies that maintain rigorous disclosure standards, provide audited financials, and meet established market quality benchmarks deserve equal access to capital-raising tools, regardless of their size, where their stock trades, or where their investors live. This is why the SEC’s proposal specifically recognizing the OTCQX and OTCQB markets under Rule 415(a)(4) matters, and why we support it.Today, smaller public companies are routinely locked out of capital-raising mechanisms their larger peers take for granted, pushing them toward private transactions that favor institutional investors and leave retail shareholders on the outside. A patchwork of state rules governing “over the counter” securities compounds the problem. These rules ignore the fact that these securities meet the same federal disclosure standards as their exchange-listed counterparts.The result: a retail investor buying shares in a well-known company on one trading venue gets a materially different experience from one buying shares in a comparable company on another. That is not a well-functioning market. It is an artifact of outdated rules that tilt the playing field against the very participants public markets were designed to serve.Overcoming skepticism
