In advance of its February meeting, the Committee released its draft recommendations, available here: http://www.sec.gov/info/smallbus/acsec/draft-committee-recommendations-statement-020113.pdf. The Committee recommends that the SEC adopt rules to increase tick sizes for smaller exchange-listed companies and permit issuers to choose their own tick sizes within certain SEC-specified ranges. The Committee also recommends that the SEC facilitate and encourage the creation of a separate U.S. equity market for small and emerging companies open to sophisticated investors. Many may be aware of the BX Venture Market, but that has not been approved as a “national securities exchange” and being considered a national securities exchange would be essential for the listed securities to be considered “covered securities” for blue sky purposes. State securities law preemption is the most significant consideration from a capital-raising perspective and would need to be addressed were any new market to be created.
The Committee also addresses the fact that the disclosure requirements applicable to smaller reporting companies may need to be reviewed and revised so that smaller reporting companies benefit from certain of the accommodations provided to EGCs by the JOBS Act. Finally, the Committee suggests a modified threshold for the “smaller reporting company” definition.