SEC Is Moving Toward Opening Pre-IPO Roadshows

The Securities and Exchange Commission is preparing a proposal that could give individual investors access to pre-IPO roadshows that are typically attended only by analysts and institutional investors.

Commissioner Laura Unger confirmed Thursday that the staff is drawing up a proposal, to be submitted in March or April, that would broaden access to IPO roadshows, or the presentations companies give to analysts and institutional investors.

The proposal could help individual investors by further discouraging selective disclosure, whereby institutions and larger investors typically receive key information ahead of retail investors. But regulators and industry observers emphasize the delicacy of the issue, suggesting it's possible that such a rule might ultimately stem the flow of information to all investors, which would fly in the face of the agency's intentions.

Information, Please

"Giving [individual investors] the most information to make as informed a decision as possible seems to be in the investor's and public's best interest," says Scott Ryles, president and CEO of Epoch Partners, a new investment bank formed by Charles Schwab (SCH Quote), Ameritrade (AMTD Quote) and others. "It's an attempt to democratize access to relevant information in making an investment decision." ...