Simplifying the Registration Process for Companies Offering Stock (H.R. 2357)

What is H.R. 2357?

(Updated July 21, 2017)

This bill would require the Securities and Exchange Commission (SEC) to modify a form that is used for listing and registering common equity securities (i.e. stock) on a national securities exchange within 45 days of this legislation’s enactment.

It would let a company use Form S-3 to register their securities if the total market value of the applicant’s stock that's not held by the company is $75 million or more, or if they have at least one class of common stock listed on a national securities exchange (like the New York Stock Exchange or the Nasdaq).

Argument in favor

The proposed requirements should make the process of registering stock with the SEC a little less burdensome, which will give more companies access to the capital they need to grow.

Argument opposed

Making the registration requirements less burdensome could lead to company’s offering stock that shouldn’t have been allowed to in the first place.

Impact

Companies registering securities (like stock); investors; and the SEC.

Cost of H.R. 2357

A CBO cost estimate is unavailable.

Additional Info

In-Depth: This bill was passed by the House Financial Services Committee through a 33 to 24 vote.

Form S-3 is sometimes used prior to an initial public offering (IPO), and companies that apply with it are required to have met all dividend and debt requirements for at least one year prior to applying.

Media:

• House Financial Services Committee Press Release
• Investopedia (Context)
• Securities and Exchange Commission (Context)
  

Summary by Eric Revell
(Photo Credit: Flickr user Rafael Matsungaga)