The Hill News

The question of just how to foster job growth in the United States has clearly moved to the center of public debate. Little noticed in this debate is the need to make a pronounced change to the federal regulatory framework governing the capital formation of small, start up and growth stage companies â€" enterprises that are fueling the majority of recent job growth.
 
Under the current regulatory framework governing initial public offerings (IPOs), companies must register their offerings in compliance with the registration provisions of the Securities Act of 1933 and separately the class of securities sold under the Securities Exchange Act of 1934 (Exchange Act), triggering an obligation to comply with a full complement of listed public company periodic reporting, governance and other regulations, including those imposed by the Sarbanes-Oxley and Dodd-Frank Acts.

The one-size-fits-all regulatory framework would apply the same level of regulation to! a fully developed billion-dollar revenue company as it would apply to a development stage company with $10 million in assets. Many small growth companies can’t incur the cost of compliance that registration under the existing framework entails, and accordingly decide not to pursue an IPO.

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