Key Takeaways:
SEC Chairman Paul Atkins is pursuing the most aggressive deregulatory agenda for US equity markets in two decades, targeting two structural rules he argues have kept private companies from going public.
SEC Chairman Paul Atkins said public markets should expand as he pushes semiannual reporting and a trade-through rule repeal to encourage more IPOs. "We need to make it easier, not harder, for companies to access public capital," Atkins said on CNBC's "Squawk on the Street" on Monday. "That means looking at the regulatory burden and asking whether every rule still serves its purpose."
The semiannual reporting proposal, unveiled in May, would allow public companies to report financial results twice a year instead of quarterly, a change President Donald Trump has long backed. The SEC received more than 200,000 public comments on the plan, the majority opposing it, according to the Wall Street Journal. Separately, Atkins has proposed rescinding Rule 611, the trade-through rule he has opposed since its inception in 2005, arguing it has fragmented liquidity rather than protecting investors.
The two reforms target what Atkins described as structural barriers that have driven companies to stay private longer or avoid public markets entirely. If adopted, the changes could reshape the US equity market's $50 trillion-plus capitalization by reducing compliance costs for listed companies and simplifying execution for institutional investors. The SEC is reviewing public comments on both proposals, with no formal timeline for final rules.
The semiannual reporting proposal represents the most significant change to public company disclosure frequency since the SEC mandated quarterly reports in 1970. Supporters including Exxon Mobil Corp. and insurance broker Gallagher argue that companies already disclose material developments outside regular earnings reports, making quarterly filings redundant. Critics, including investor advocacy groups and pension funds, say reducing reporting frequency would weaken transparency and leave investors with less timely information.
Atkins's push against Rule 611 targets a regulation that requires brokers to route orders to the exchange displaying the best quoted price, a mechanism designed to prevent trade-throughs in the pre-electronic era. Mett Kinak, global head of equity trading at T. Rowe Price, said the rule has "outlived its usefulness" and effectively protects commercial venues at the expense of market participants. The SEC's proposal to rescind the rule has drawn broad support from trading firms, though some warn that removing protected quote status without a unified framework for the Securities Information Processor could fragment the National Best Bid and Offer benchmark.
The last major deregulatory push for US equity markets came under the 2012 JOBS Act, which eased listing requirements for emerging growth companies and led to a surge in IPOs in subsequent years. The number of US-listed companies has since declined to roughly 4,000 from a peak of more than 7,300 in 1996, according to data from the Center for Research in Security Prices. Atkins's agenda aims to reverse that trend by reducing the cost of being public.
For investment banks, a revival in IPO activity would represent a significant revenue opportunity. US IPO proceeds totaled $35 billion in 2025, down from the pandemic-era peak of $155 billion in 2021, according to data compiled by Bloomberg. Underwriters including Goldman Sachs, Morgan Stanley and JPMorgan Chase have seen equity capital markets fees decline as the IPO pipeline remained subdued.
The SEC has not set a date for final action on either proposal. Atkins said the agency is reviewing public comments and will move forward "deliberately but efficiently." The next milestone is the July 31 deadline for the SEC to respond to a congressional inquiry on agentic trading, a separate but related issue involving AI-powered trading tools.
This article is for informational purposes only and does not constitute investment advice.
