- Small-cap public companies have suffered from a lack of capital formation. This has inhibited job creation, innovation and investment opportunities stemming from startups and small companies.
- The core problem in the capital formation issue is the lack of trading liquidity in many publicly-traded small-cap companies. Existing market structure rules have made it challenging for meaningful institutional investor ownership, the primary source of trading liquidity.
- This problem adversely impacts individual investors as they comprise the vast majority of ownership in small-cap stocks. Studies have shown that stocks achieve greater valuations with the presence of institutional investment.
- A pilot program, as outlined in the Alternative Recommendation presented to the Committee, provides for a realistic way to enable institutional investors to return to the small-cap market while balancing the needs of investor protection and promoting capital formation.
- A pilot program offers a fair process to test a market structure that we believe will have a positive impact on the US economy, individual investors, institutional investors and small companies.
Job Growth Advocates Endorse The Call For A Pilot Trading Program For Small-Cap Public Companies In The Alternative Recommendation Presented To The SEC Investor Advisory Committee
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