This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Job Growth Advocates Encouraged By Passage Of Legislation Calling For Pilot Trading Program For Small-Cap Companies

Stocks in this article: COWN

Equity Capital Formation (ECF) Task Force co-chairs, Scott Kupor, Managing Partner at Andreessen Horowitz, and Jeffrey M. Solomon, CEO of Cowen and Company, expressed encouragement after the U.S. House of Representatives passed the Small Cap Liquidity Act (H.R. 3448), sponsored by Congressman Sean Duffy (R-WI).

“Yesterday’s passage of the Small Cap Liquidity Act by the U.S. House of Representatives is evidence of growing support for meaningful market structure reform to help small-cap companies grow and thrive, as they are an important segment of our nation’s economy,” said Mr. Kupor and Mr. Solomon. As discussed in the report, “ From the On-Ramp to the Freeway: Refueling Job Creation and Growth by Reconnecting Investors with Small-Cap Companies,” the ECF Task Force concluded that increasing tick sizes from 1 cent to 5 cents and limiting trading increments is a surgical fix to the market structure challenges facing the small-cap market.

Mr. Kupor and Mr. Solomon continued, “The findings of the ECF Task Force, combined with passage of legislation in the U.S. House of Representatives, provide the Securities and Exchange Commission with clear bipartisan signals of encouragement to design a meaningful pilot program for small-cap companies on market structure reform. We urge the Commission to consider a program, as suggested in the ECF Task Force’s report, which provides clear and effective guidelines for implementation and realistic measurements of success and failure while ensuring investor protection. A pilot trading program would allow a fair process to test market structure and would only include the small-cap market, which represents approximately 2% of total equity trading volume in the U.S.”

Key points from the ECF Task Force include:

  • 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 ECF Task Force report, will provide for a realistic way to enable capital to start flowing to the small-cap market while balancing the needs of investor protection and promoting capital formation.
  • A viable pilot program offers a fair process to test a market structure will have a positive impact on the US economy, individual investors, institutional investors and small companies.

Mr. Kupor and Mr. Solomon commented, “Congress’ passage of legislation on market structure reform for small-cap companies is an essential step towards fostering the liquidity and capital formation necessary to promote job growth. We thank Congressman Duffy and his colleagues for their efforts in this important area. We look forward to working with the SEC Commissioners and staff in the design of a pilot program.”

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs