Making IPOs Great Again: SEC Leaders Double Down on Capital Formation Agenda

Over the past several months, and most recently in a series of statements delivered at the April 2026 Small Business Capital Formation Advisory Committee Meeting (the SBCAFC Meeting), SEC leaders have articulated a consistent and increasingly detailed agenda aimed at revitalizing the U.S. initial public offering (IPO) market and easing the burdens associated with the current SEC reporting regime. In what many believe to be the first of many proposals, the SEC formally memorialized this agenda in its May 5, 2026, proposed amendments for semiannual reporting.

Taken together, a central message has emerged from this shift in regulatory philosophy: From the SEC's perspective, the framework governing IPOs and ongoing reporting obligations for public companies, particularly small cap companies, must be reformed, and doing so will remain a regulatory priority. The SEC's message dovetails with state efforts to attract capital and facilitate its formation, as well as challenge New York and Delaware as business and financial centers – for example, the launch of the Texas Business Courts, opening Miami and Texas Stock Exchanges, and many prominent companies now having more employees located in Florida and Texas than in locations such as Chicago or New York.

The Problem: IPO Decline

Since late 2025, Paul Atkins, Chairman of the SEC, has repeatedly emphasized the decades-long decline in U.S. IPOs, noting that number of publicly traded companies has shrunk by approximately 40 percent since the mid-1990s. Chairman Atkins attributes this decline to "decades of accretive rule making," which narrowed the path to becoming a public company while also creating overly burdensome reporting obligations that ultimately increase the costs of remaining one. He has also noted that in the current market, the few "unicorns" that do go public tend to delay doing so until after very late-stage private funding rounds and often view an IPO as a liquidity event for insiders rather than the once very important capital-raising milestone it was intended to be.

The Solution: Reframing the SEC's Regulatory Approach

Throughout a series of statements over the past few months, Chairman Atkins and other members of SEC leadership have reinforced and further refined a strategy to transform the SEC's reporting regime, primarily by focusing on a return to a "first principles" disclosure framework. Below are some key takeaways from these statements.

"Make IPOs Great Again" – The Three Pillars: In his testimony before the U.S. House Financial Services Committee on February 11, 2026, Chairman Atkins outlined his principles-based "Make IPOs Great Again" plan to re-incentivize capital formation, which he has reinforced throughout his chairmanship. This plan involves three pillars: 1) re-anchoring disclosures in materiality so that investment decisions can turn on economic signals rather than on regulatory noise, 2) depoliticizing shareholder meetings by restoring their focus to significant corporate matters and 3) allowing public companies to have litigation alternatives focused on shielding innovators from frivolous lawsuits while also protecting investors from fraudulent practices. In his remarks at the Texas Stock Exchange event, Welcome to the Boom Belt: A Return to First Principles in Public Markets, on April 7, 2026, Chairman Atkins built upon the Three Pillars noting that the SEC is also "focused on ensuring the States, and not the SEC, regulate matters of corporate governance" and that over time the SEC has used its disclosure authority as a vehicle for setting governance standards that are more appropriately governed by state law.

Modernize, Rationalize and Streamline: In his testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs on February 12, 2025, and in subsequent statements, Chairman Atkins, noted that although the SEC does not want to "gut" corporate disclosure, it must "modernize, rationalize and streamline reports so that they are meaningful, understandable, and not a repellant to investors." This theme was further reinforced in his remarks at the Texas A&M School of Law Corporate Law Symposium, on February 17, 2026, in which Chairman Atkins detailed his direction to the SEC staff to explore Regulation S-K, and noted that disclosure requirements must be rooted in the concept of financial materiality and scaled to a company's size and maturity. Chairman Atkins subsequently revisited the concept of materiality in his speech, "The Art and Science of Materiality" on March 19, 2026, in his prepared remarks before SEC Speaks on March 19, 2026, and in his keynote remarks at the Economic Club of Washington on April 21, 2026, in which he discussed how the disclosure rulebook needed to be revisited by refocusing on the definition of "materiality" and trimming requirements that burden the market without benefiting the audience at issue, the investors.

Extended IPO "On Ramp": In his remarks at the 45th Annual Small Business Forum on March 9, 2026, and in subsequent statements, Chairman Atkins, in further expanding on the Three Pillars, provided a concrete articulation of what the SEC's "Make IPOs Great Again" plan may look like in practice, particularly for smaller companies. He noted that currently, accommodations for emerging growth companies under the JOBS Act can terminate as soon as one year after a company's IPO and automatically sunset after five years. Instead, the SEC should consider an extended "on ramp" encouraging smaller companies to go and stay public.

Expanding Emerging and Smaller Company Accommodations: In his keynote remarks at the Economic Club of Washington on April 21, 2026, Chairman Atkins noted that he has directed the SEC to evaluate "existing accommodations that are currently available only for emerging and smaller companies to more businesses."

Expanded Shelf Registration for Quicker Capital Access: In his remarks at the Small Business Capital Formation Advisory Committee Meeting on April 28, 2026, and in other statements, Chairman Atkins described the current "baby shelf" rules for Form S-3 as "unnecessarily complex and overly restrictive," making it difficult for smaller companies to raise follow-on capital quickly. He proposed providing smaller public companies with full access to shelf registration so that they can access the public markets more efficiently.

Rethinking Quarterly Reporting: In multiple statements, and most recently in his remarks at the Small Business Capital Formation Advisory Committee Meeting on April 28, 2026, Chairman Atkins proposed giving companies the option to file periodic reports quarterly or semiannually, depending on industry norms, business models and investor expectations.

Examining the IPO Process: Commissioner Hester Peirce in her speech at the SBCFAC Meeting on April 28, 2026, offered a complementary perspective to Chairman Atkins' prior statements, discussing the practical burdens of the IPO process, particularly for smaller companies. She acknowledged that that "[g]oing public entails a lot of work from a lot of people" and that "[t]he process is expensive and time-consuming," noting that "[f]or small companies with fewer resources the process can be particularly taxing." She also noted that although some accommodations exist for smaller companies, the SEC could do more for companies of all sizes seeking to go public and stay public and endorsed the SEC's ongoing work to reduce compliance costs. In her concluding remarks, Commissioner Peirce posed a series of practical questions to consider, including whether offering size affects a company's ability to engage underwriters, how much of management's time is diverted from running the business during the IPO process and how the SEC could shorten the IPO process without losing the benefits from discipline and rigor imposed by the process. Commissioner Mark Uyeda echoed similar sentiments in his remarks to the Small Business Capital Formation Advisory Committee on April 28, 2026, in which he discussed how the current SEC reporting regime creates both economic and structural barriers to entry into the public markets and most acutely for smaller companies.

And They're Off! SEC Proposes Optional Semiannual Reporting

On March 5, 2026, the SEC proposed a rule and form amendments that would give public companies the option of filing semiannual reports on Form 10-S rather than quarterly reports on Form 10-Q, as currently required under federal securities laws. The option to file on Form 10-S would be available to all reporting companies, regardless of filer status, market capitalization, revenues or other criteria. Form 10-S would require the same narrative disclosures and financial information as existing Form 10-Q but cover a six-month period rather than a fiscal quarter. In addition, the same filing deadlines for Form 10-Q would apply to Form 10-S (40 days for large accelerated filers and accelerated filers or 45 days for all other filers). The election to report on either a quarterly or semiannual basis would be made annually by checking the appropriate box on the cover page of the company's Form 10-K. As arguably the most widely discussed proposal, these proposed amendments, if adopted, would mark a significant departure from the long-standing quarterly reporting regime. Public comments on the proposal are due by July 6, 2026. Following the proposal's release, each of Chairman Atkins, Commissioner Peirce and Commissioner Uyeda released statements, each championing both the flexibility and applicability of the proposal to companies in all stages of the public company life cycle. Chairman Atkins also noted that he expects the SEC will consider a series of additional proposals that, if adopted, "will not only redefine what it means to be a public company, but will make being public attractive again."

What Comes Next?

The remarks from SEC leadership over the past few months and the SEC's proposed amendments for semiannual reporting strongly reinforce Chairman Atkins' plan to "Make IPOs Great Again" and shed light on what this plan may look like in practice. Though it remains uncertain how quickly these ideas will further translate into additional formal proposals, SEC leadership's consistent messaging suggests that IPO and public company disclosure reform is not a passing theme but a definitive regulatory priority. If the SEC follows through, the result could be a meaningful recalibration of the public company model, one that lowers the barrier to entry and provides quicker access to public capital.

Director Fiduciary Duties When Preparing to IPO or Undertake M&A Activity in an Evolving Regulatory Environment

Coinciding with the SEC's focus on revitalizing U.S. capital markets, public company mergers and acquisitions (M&A) and IPOs are currently on the rise. As public market opportunities increase, directors and officers of public companies and acquisition targets should remain aware of their fiduciary duties.

Core to these duties remain the duty of care, requiring that directors and officers manage the company's affairs with the diligence, skill and prudence that an ordinary person would use in similar circumstances, as well as duty of loyalty, requiring that directors and officers act in good faith while avoiding self-dealing and conflicts of interest.

In the wake of companies fleeing Delaware in the aftermath of judicial decisions that were viewed as being unfavorable to officers and directors, colloquially referred to as "DEXIT," Texas and Nevada have become favored destinations for incorporation. To gain the edge over Delaware and Nevada, Texas adopted several reforms to its corporate law to provide stronger protection for officers and directors and greater predictability when faced with an alleged breach of fiduciary duty.

In addition to establishing the Texas Business Court to rival Delaware's Court of Chancery, though preserving the right to a jury trial not available in the Court of Chancery, the Texas legislature amended the Texas Business Organizations Code (TBOC) to codify its business judgement rule for public companies and companies that elect to be governed by the provision. Unlike Delaware, where the business judgement rule remains a judicially created and interpreted common law concept, officers and directors in Texas now have a statutorily defined standard that presumably offers greater certainty of outcome.

The Texas legislature also adopted multiple safe harbors for breaches of the duty of loyalty that offer officers and directors an alternative to Section 144 of the Delaware General Corporation Law, which was itself recently amended to permit mitigation of conflicts (other than those that arise in a going private transaction) if approved by either 1) a majority of the disinterested directors or a disinterested committee of directors or 2) a majority of the votes cast by disinterested stockholders. Under TBOC Section 21.418, an interested director transaction is generally permitted and not voidable if, after disclosure or with knowledge of the conflict, the contract or transaction is fair to the corporation and approved in good faith by either 1) the board or a board committee by a majority of the disinterested directors or committee members or 2) a vote of the corporation's shareholders entitled to authorize the transaction (notably, such shareholders are not required to be disinterested as required under the Delaware safe harbor).

The table below compares key differences on director fiduciary duties under Texas and Delaware law:

Key Takeaways

• SEC leadership's stated focus and recently proposed rules regarding semiannual reporting indicate that capital markets reform and IPO revitalization will continue to be at the forefront of the SEC's regulatory priorities.
• Evolving state corporate law – in particular in Texas – has created a competitive environment, which has caused companies to reconsider their state of incorporation.
• SEC reporting reform, IPO revitalization and evolving state corporate law are converging in ways that could materially affect public companies, IPO candidates, boards, and dealmakers.

The SECond Opinions Blog will continue to monitor developments on this topic and provide updates. If you have questions about these developments, please reach out to the authors or another member of Holland & Knight's team.