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14 Va. L. & Bus. Rev. 1 (2020)

handle is hein.journals/valbr14 and id is 1 raw text is: VIRGINIA LAW & BUSINESS REVIEW VOLUME 14 WINTER 2020 NUMBER 1 WHEN, AS, AND IF: HOW AN OBSCURE SECURITY COULD MAKE INITIAL PUBLIC OFFERINGS MORE EFFICIENT Frederick A. Elmore IVt ABSTRACT Public equity markets face increasing competition from private sources of capital. Once a rich and reliable source of diversified wealth creation, the growth of relatively inexpensive substitute financing sources has attenuated the size and diversity of the public markets. While looking for ways to make the public securities markets more attractive, Congress should consider taking a cue from the market's past. When-issued trading could help reduce the transaction and agency costs associated with the current firm-commitment IPO process, making public markets more attractive and accessible to private companies. As an independent signal and unbiased estimate of the underlying security's seconday market price, the when-issued market price could provide greater certainty about aggregate demand for the offering and allay agency concerns, potentially leading to lower underpricing spreads. The resulting increase in efficiency of the IPO pricing process would benefit capitalformation by making the transition to public markets more attractive to private companies. The creation of a regulated when-issued market for IPOs could be accomplished with a simple amendment to the Securities Act and a ner SEC regulation pursuant to Section 12(d) of the Exchange Act. t Frederick Elmore, an Associate at Cooley LLP, graduated from the University of Virginia School of Law with a J.D. and the Darden School of Business with an M.B.A. in 2019. He would like to thank Andrew Vollmer for his provocative questions, insightful comments, and reliable advice. 1 Copyright © 2020 Virginia Law & Business Review Association

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