Technical corrections only. The v4 version of the bill includes the name of the House Clerk and adds information about its referral to the Senate, reflecting its legislative journey. No substantive policy changes were made between v3 and v4.
Encouraging Public Offerings Act of 2025
- Sponsor
- Rep. Wagner, Ann [R-MO-2]
- Committees
- Banking, Housing, and Urban Affairs Committee (primary)
- Last action
- Jun 24, 2025
Bottom line
The bill aims to reduce regulatory burdens and costs for all companies seeking to go public or raise capital, potentially encouraging more public offerings, while granting the SEC conditional authority to mitigate risks for non-EGCs.
What it actually does
This bill expands two provisions of the Securities Act of 1933, previously available only to 'emerging growth companies' (EGCs), to all issuers. Specifically, it allows all companies to 'test the waters' with qualified institutional buyers and institutional accredited investors before or after filing a registration statement, and permits all companies to confidentially submit draft registration statements to the SEC for review prior to public filing for initial public offerings, initial registrations, and follow-on offerings. The bill also grants the SEC authority to impose additional requirements on non-EGCs for these activities, subject to public notice, comment, and a report to Congress.
Proponents argue
Supporters argue that extending these successful regulatory flexibilities, which have proven beneficial for EGCs, to all issuers will foster capital formation, reduce the costs and risks associated with public offerings, and make public markets more attractive. They contend that this will encourage more companies to go public, benefiting investors through increased choice and economic growth.
Opponents contend
Critics may contend that expanding these provisions to all companies, particularly larger and more established non-EGCs, could diminish market transparency and investor protections. They might argue that delaying public access to crucial financial information, even temporarily, could create information asymmetries and hinder informed investment decisions, especially if the SEC's rulemaking authority is not robustly exercised.
The bill is very short and clearly written, making it accessible for a quick and informed evaluation.
Section 2
Expanding 'Testing the Waters' to All Issuers
This section amends Section 5(d) of the Securities Act of 1933 to allow any issuer, not just emerging growth companies (EGCs), to engage in oral or written communications with qualified institutional buyers or institutional accredited investors to gauge interest in a potential offering. This 'testing the waters' activity can occur before or after filing a registration statement. The provision also authorizes the Securities and Exchange Commission (SEC) to impose additional terms or conditions on non-EGCs for these communications, but only after public notice and comment, and a report to Congress detailing its findings.
Supporters argue
Supporters argue that extending 'testing the waters' to all issuers will significantly reduce the uncertainty and cost associated with public offerings, making capital markets more efficient and accessible. They believe this flexibility, which has been successful for EGCs, will encourage more companies to go public by allowing them to better assess market demand before committing significant resources.
Critics contend
Critics might argue that expanding 'testing the waters' to all companies, especially larger ones, could lead to a reduction in transparency for the broader market. They may contend that allowing pre-filing communications without full disclosure for non-EGCs could create an uneven playing field or disadvantage less sophisticated investors who do not have access to these early communications.
Tradeoffs
This provision balances the desire to facilitate capital formation and reduce regulatory friction for companies against concerns about maintaining market transparency and ensuring equitable access to information for all investors, particularly as it applies to larger, more established firms.
Section 3
Confidential Review of Draft Registration Statements for All Issuers
This section amends Section 6(e) of the Securities Act of 1933 to permit any issuer to confidentially submit a draft registration statement to the SEC for nonpublic review. This applies to initial public offerings (IPOs), initial registrations of securities under Section 12(b) of the Securities Exchange Act of 1934, and follow-on offerings. The draft and all amendments must be publicly filed a specified number of days before the offering's effective date or exchange listing (10 days for IPOs/initial 12(b) registrations, 48 hours for follow-on offerings). Similar to Section 2, the SEC is granted authority to impose additional requirements on non-EGCs for these confidential submissions, subject to public notice, comment, and a report to Congress.