William Hinman, Director of the SEC Division of Corporation Finance (the "Division"), described approaches taken by the SEC to ease regulatory burdens in order to incentivize companies to go public. His remarks were delivered at the Practising Law Institute's 17th Annual Institute on Securities Regulation in Europe.
Mr. Hinman affirmed the SEC's commitment to protecting investors, with a particular emphasis on retail investors. He argued that easing regulation on public companies and incentivizing more companies to go public will facilitate capital formation and contribute to more transparent and liquid markets. In turn, he said, investors will benefit from increased investment opportunities.
Mr. Hinman asserted that the additional regulatory burdens imposed on public companies act as a significant deterrent to private companies considering IPOs. He underscored recent Division efforts to create a more conducive regulatory environment, such as improving upon its guidance and policy updates by clarifying and "streamlining" the regulatory process for participants. The Division modified the capital-raising process for first-time registrants and newly public companies by expanding the nonpublic review process, which resulted in a significant increase of submissions.
Mr. Hinman stated that the SEC is receptive to engagement with all industry members and is making concerted efforts to reach out to and collaborate with companies. By example, he stated, the SEC will now consider requests made under Rule 3-13 of Regulation S-X for modified financial statements. Such revisions are aimed at saving companies time and money.
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