Remarks by Chair Atkins on Capital Formation and the INVEST Act

Key Takeaways

• U.S. public companies down 40% since 1990s.
• INVEST Act enables “test‑the‑waters” IPO pre‑launch.
• New accredited investor exam replaces income net‑worth test.
• Expanded retirement account options broaden investor base.
• SEC to simplify disclosures, depoliticize meetings, curb frivolous suits.

Summary

Chairman Paul Atkins highlighted the steep 40% drop in U.S. public companies and outlined a three‑pillar strategy to revive capital formation. He praised the bipartisan INVEST Act and the Empowering Main Street in America Act for introducing “test‑the‑waters” IPO pilots, a knowledge‑based accredited‑investor exam, and broader retirement‑account investment options. The SEC plans to refocus disclosures on materiality, depoliticize shareholder meetings, and provide litigation alternatives to protect innovators. He urged Congress to move the bills forward to sustain America’s market leadership.

Pulse Analysis

The United States has long been the global hub for equity financing, yet the number of listed companies has fallen dramatically since the mid‑1990s. This contraction reflects not only market cycles but also regulatory friction that discourages smaller innovators from going public. By framing capital formation as a three‑pillar effort—material‑focused disclosures, depoliticized shareholder meetings, and tailored litigation pathways—Chairman Atkins signals a shift toward a more efficient, innovation‑friendly ecosystem.

Key to this transformation are the INVEST Act and the Empowering Main Street in America Act. The “test‑the‑waters” provision lets firms gauge investor appetite before committing to a full IPO, reducing upfront costs and uncertainty. A knowledge‑based accredited‑investor exam replaces the traditional income‑or‑net‑worth gate, opening private markets to financially sophisticated individuals regardless of wealth. Additionally, expanding eligible retirement‑account investments widens the pool of capital that can flow to emerging companies, potentially increasing liquidity and diversification for savers.

If enacted, these reforms could rejuvenate the pipeline of U.S. IPOs, bolstering market depth and reinforcing America’s leadership in global finance. Lowered entry barriers may attract both domestic and foreign innovators, while clearer, material‑centric disclosures improve investor confidence. Ultimately, a more dynamic capital market supports job creation, social mobility, and sustained economic growth, aligning regulatory policy with the needs of a rapidly evolving business landscape.