Re: Registered Offering Reform
Release Nos. 33-11418; 34-105513; IC-36160
File No. S7-2026-17
Dear Secretary Countryman,
Capital Institutional Services, Inc. (“CAPIS”) appreciates the opportunity to comment on the Commission’s proposal on Registered Offering Reform. CAPIS is an independent institutional brokerage firm based in Dallas, Texas, and we support the Commission’s effort to reduce unnecessary regulatory burdens that inhibit capital formation in the public markets. Public markets remain the primary means of wealth creation in the US, and it is imperative that we provide an attractive platform for both companies and the investing public to participate.
A Welcome Step Toward More Accessible Public Markets
CAPIS supports the proposal because it is a practical, measured step toward making the U.S. public markets more accessible and more competitive. The proposed amendments would expand Form S-3 and shelf-offering eligibility, extend certain enhanced registration and communication benefits to a broader population of issuers, modernize Form S-1 by expanding incorporation by reference, and preempt state securities-law registration and qualification requirements for registered offerings. The Commission has explained that these changes are intended to facilitate capital formation in the public securities markets while preserving appropriate investor protections, and CAPIS agrees with that overall approach.
We particularly support the proposed elimination of the one-year seasoning requirement and the $75 million public-float threshold as barriers to broader Form S-3 eligibility. The proposal correctly recognizes that those requirements are built on older assumptions about how information reaches the market. In today’s environment, where Exchange Act reports are available electronically through EDGAR and can be accessed broadly and at low cost, the more relevant question is whether investors have timely access to current issuer information, not whether an issuer satisfies legacy proxies for “market following.” CAPIS believes the Commission is right to reconsider those earlier proxies in light of technological change and modern market practice.
We also support the Commission’s broader effort to make registered offerings more usable in real time. The ability to access the public markets quickly and efficiently matters. It affects whether companies view the public markets as a practical capital-raising venue or as a venue burdened by avoidable delay, cost, and procedural complexity. The Commission estimates that the proposal could increase by more than 60 percent the number of issuers eligible to offer an unlimited amount of securities on Form S-3, increase by more than 200 percent the number eligible for all enhanced registration and communication benefits, and increase by up to 106 percent the number eligible to forward incorporate by reference on Form S-1. Those are meaningful potential improvements.
At the same time, CAPIS does not read the proposal as abandoning investor protection. We support the Commission’s decision to retain current and timely Exchange Act reporting requirements and to continue excluding categories of issuers that present heightened investor-protection concerns. In our view, that is the correct balance. Regulatory modernization is strongest when it removes friction that no longer meaningfully benefits investors while preserving disclosure discipline and sensible guardrails. For similar reasons, CAPIS agrees with the Commission’s instinct not to reintroduce unnecessary uncertainty into shelf takedowns through additional requirements that would undermine the flexibility the proposal is designed to provide.
CAPIS also supports the Commission’s effort to reduce the costs associated with multiple layers of regulation in registered offerings, including the proposed preemption of state securities-law registration and qualification requirements for all registered offerings. If the purpose of this rulemaking is to make registered offerings more efficient and less burdensome, reducing duplicative state-level registration requirements for those offerings is consistent with that objective. It is also consistent with a broader effort to make the public markets more attractive to issuers that otherwise may decide that the public route is simply too cumbersome relative to available alternatives.
Regulatory Modernization Can Help Strengthen Public Market Formation
From CAPIS’ perspective, these changes matter not only for issuers’ transactional convenience, but also for market quality. Healthy capital markets require active participation in the price-discovery process. Public markets are most valuable when investors can evaluate companies on their fundamentals and allocate capital accordingly. CAPIS has long been concerned that a combination of structural pressures has made public markets less attractive to growth-oriented companies and less effective as a venue for merit-based capital allocation. This rulemaking does not address every one of those pressures, but it does address one important part of the problem: outdated regulatory burdens associated with going public and raising capital publicly.
Active management is central to that function. Active investors do not simply absorb market exposure; they evaluate companies, assess risk and reward, take contrary positions, support fundamental research, and help translate issuer performance into market value. But active price discovery depends on the continued vitality of the public markets themselves. If fewer growth-oriented companies choose to go or stay public, active managers have fewer opportunities to perform that capital-allocation role in the public markets. For that reason, reducing unnecessary regulatory friction around registered offerings is directly relevant to market quality. The proposed amendments will not, by themselves, restore the role of active price discovery, but they are directionally consistent with a healthier, more competitive public-market ecosystem.
The data underscores why incremental public-market reforms matter. Professor Jay Ritter of the University of Florida has shown that the number of domestic operating companies listed on major U.S. exchanges fell from 7,451 at its 1997 peak to 3,657 at the end of 2025. His data also shows that the median age of IPO issuers was 12 years in 2025, compared with 8 years in 1996. CAPIS does not suggest that any one factor explains those trends. But they are consistent with the concern that companies are going public later and that the public markets have become a less relied-upon venue for earlier-stage growth capital formation. Against that backdrop, regulatory reforms that reduce avoidable burdens on registered offerings are both timely and warranted.
Registered Offering Reform in Broader Context
CAPIS also recognizes that this rulemaking addresses only part of a broader public-market challenge. In our view, public-market vitality is influenced by taxation, regulation, and public perception. This proposal speaks to the regulatory component, and for that reason it is welcome. Other issues – including the tax treatment of different investment vehicles and the broader market environment affecting active price discovery – will require action outside this rulemaking.
The fact that this proposal is not a complete solution is not a reason to discount it. It is a reason to adopt it and continue the work.
For these reasons, CAPIS urges the Commission to adopt the proposed Registered Offering Reform substantially as proposed and to continue reviewing legacy requirements that make it harder for companies to go and stay public without producing commensurate investor-protection benefits.
Respectfully submitted,
David Choate
Chief Operating Officer, Executive Director of Sales and Trading, CAPIS