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U.S. OVERNMENT
INFORMATION
Op
115TH CONGRESS REPORT
2d Session HOUSE OF REPRESENTATIVES 115-887
MIDDLE MARKET IPO UNDERWRITING COST ACT
AUGUST 3, 2018.-Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. HENSARLING, from the Committee on Financial Services,
submitted the following
REPORT
[To accompany H.R. 6324]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred the
bill (H.R. 6324) to require the Securities and Exchange Commission
to carry out a study of the direct and indirect underwriting fees,
including gross spreads, for mid-sized initial public offerings, hav-
ing considered the same, report favorably thereon with amend-
ments and recommend that the bill as amended do pass.
The amendments are as follows:
Strike all after the enacting clause and insert the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the Middle Market IPO Underwriting Cost Act.
SEC. 2. STUDY ON IPO FEES.
(a) STUDY.-The Securities and Exchange Commission, in consultation with the
Financial Industry Regulatory Authority, shall carry out a study of the costs associ-
ated with small- and medium-sized companies to undertake initial public offerings
(IPOs). In carrying out such study, the Commission shall-
(1) consider the direct and indirect costs of an IPO, including-
(A) fees, such as gross spreads paid to underwriters, IPO advisors, and
other professionals;
(B) compliance with Federal and State securities laws at the time of the
IPO; and
(C) such other IPO-related costs as the Commission determines appro-
priate;
(2) compare and analyze the costs of an IPO with the costs of obtaining alter-
native sources of financing and of liquidity;
(3) consider the impact of such costs on capital formation;
(4) analyze the impact of these costs on the availability of public securities
of small- and medium-sized companies to retail investors; and
(5) analyze trends in IPOs over a time period the Commission determines is
appropriate to analyze IPO pricing practices, considering-
(A) the number of IPOs;
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