In our November 2011 client alert, we discussed many of the proposed legislative initiatives designed to ease the burdens on emerging and smaller companies and promote capital formation, particularly through exempt offerings. Regulators now have begun to focus on measures that would encourage smaller companies to pursue initial public offerings, or IPOs. One such measure was introduced in the Senate on December 1 by Senator Charles Schumer (D. NY), along with Senators Thomas Carper (D. DE), Mike Crapo (R. ID), Patrick Toomey (R. PA) and Mark Warner (D. VA). The bill echoes a number of the recommendations that were included in a report entitled “Rebuilding the IPO On-Ramp” (the “Report”), presented to the U.S. Department of the Treasury by the IPO Task Force in October 2011.

In March 2011, the U.S Treasury Department convened the Access to Capital Conference to “gather insights from capital markets participants and solicit recommendations for how to restore access to capital for emerging companies – especially public capital through the IPO market.” At this conference, a small group of professionals representing broad sectors of the IPO market decided to form the IPO Task Force (the “Task Force”) to examine the challenges that emerging growth companies face in pursuing IPOs, and to provide recommendations for restoring effective access to the public markets for emerging growth companies.