U.S. Rep. Tom Emmer (R-MN) on Dec. 6 sponsored legislation that would permit the creation of venture exchanges, which are markets specifically designed to support the trading of small and emerging growth companies, as well as currently listed, but liquidity-challenged securities.
The Main Street Growth Act, H.R. 6623, which Rep. Emmer introduced alongside two Republican original cosponsors, aims to create more jobs, improve capital formation, and encourage more Initial Public Offerings (IPOs), according to a bill summary provided by the congressman’s staff.
“IPOs are on a steep decline, which means more exciting investment opportunities are reserved for accredited investors instead of everyday Americans,” Rep. Emmer said. “Recognizing the continued challenges we face in courting new IPOs, and, understanding that liquidity is key for small companies interested in going public, as well as securities currently trading in the marketplace, it is clear that we must take steps to better tailor our markets in order to account for the varying size and nature of potential public companies if we are to encourage new capital formation.”
H.R. 6623 would permit the U.S. Securities and Exchange Commission to provide for the creation of venture exchanges, which would foster an active and liquid secondary trading environment for small and emerging growth companies to access the capital they need to grow, the summary says.
In turn, these exchanges would encourage more early-stage IPOs that would enable retail investors to invest in early-stage, high-growth companies, states the summary.
“When businesses go public, jobs are created and new centers of wealth are formed,” said Rep. Emmer. “I look forward to working with my colleagues to support the success of our nation’s entrepreneurs and capital markets.”