U.S. Rep. Tom Emmer’s (R-MN) Main Street Growth Act passed the U.S. House on July 10, moving the measure closer to becoming a federal law.
“The House took an important step to add to this economy’s growing momentum by passing the Main Street Growth Act,” Rep. Emmer said. “It is critical that the current market structure meets the need for all types of companies to encourage more to go public which generates millions of jobs and trillions of dollars in revenue for the economy.”
H.R. 5877 seeks to encourage more early-stage initial public offerings (IPOs) by facilitating the creation of new U.S. venture exchanges, according to a statement from the congressman’s staff.
Such venture exchanges, similar to Nasdaq’s European growth market First North, Canada’s TSX Venture Exchange and the United Kingdom’s Aim Market, are specialized securities exchanges for small and emerging growth companies. The new exchanges could provide these so-called small cap companies with a path to obtain the liquidity and capital traditionally provided via the IPO process.
In turn, the bill also could help turn around the slump in the nation’s IPO participation rate, which has declined to half the number of publicly listed companies than the United States had 20 years ago, according to a U.S. Chamber of Commerce report, Expanding the On-Ramp: Recommendations to Help More Companies Go and Stay Public, which was released this spring.
H.R. 5877 would “embolden more early stage IPOs and improve capital formation for businesses in Minnesota and across the United States,” the congressman pointed out.
Specifically, H.R. 5877 would allow the U.S. Securities and Exchange Commission (SEC) to provide for the creation of such venture exchanges, according to a summary from Rep. Emmer’s office, and among other provisions would establish an Office of Venture Exchanges under the SEC’s Division of Trading and Markets to study and monitor the effectiveness of the new exchanges.
Rep. Emmer introduced the measure on May 18 and prior to the full House approval on July 10, it received unanimous approval from the U.S. House Financial Services Committee, 56-0.
“As it heads to the Senate, I look forward to both sides of the aisle coming together to ensure that American entrepreneurs and workers can continue to succeed,” Rep. Emmer said about the proposal.