The SEC Small Business Capital Formation Advisory Committee (SBCFAC) will meet next month on February 25th. This Committee is tasked with advising the Commission on issues and policies impacting smaller firms while making recommendations on how to improve the ecosystem.
Today, the SBCFAC released the agenda regarding the topics of discussion.
To begin the session, the Office of the Advocate will briefly review its annual report, released late last year.
The morning session involves a discussion as to how to improve access to capital for emerging fund managers. This follows a prior discussion at the Committee’s last meeting.
The afternoon session includes a discussion on challenges faced by small firms not listed on a national exchange. Dan Zinn, GC and Chief of Staff from OTC Markets, will present. OTC Markets is actually an ATS [ alternative trading system] and not a national exchange. It aims to provide liquidity for smaller firms, frequently small banks and some international firms that may not be interested in adhering to the requirements and cost of trading on a national exchange. The agenda states that the “Committee will begin exploring ways to address some of the challenges facing small public companies.”
As technology is changing rapidly and digital securities are on the horizon, this topic is timely.
While SBCFAC has, over the years, provided solid advice to the SEC, the recommendations have typically been ignored. This includes the Commission under the leadership of former Chairman Gary Gensler. Perhaps the SBCFAC will have better luck with the Commission under the leadership of nominated Chairman Paul Atkins or acting Chairman Mark Uyeda.
The meeting will be live-streamed on the SEC website beginning at 10 AM ET on February 25th.
10:00 Call to Order; Introductory Remarks by Commissioners and Newest Committee Members
10:30 Update from the SEC’s Office of the Advocate for Small Business Capital Formation
The SEC’s Office of the Advocate for Small Business Capital Formation will provide an overview of the Office’s FY2024 Annual Report, which includes in-depth data on the state of capital raising activity from startup to small cap along with the Office’s policy recommendations.
11:00 Continue Exploring Ways to Support and Facilitate Capital Formation for Emerging Fund Managers
As a follow-up to the Committee’s November 13, 2024 discussion, the Committee will continue exploring ways to support and facilitate capital formation for private funds and emerging fund managers, and deliberate possible related recommendations. To facilitate discussion and deepen the Committee’s understanding of certain capital raising frictions, members will hear from an angel investor. Thereafter, the Committee will have the opportunity to learn more about the role emerging manager fellowship programs can play in addressing institutional barriers for underrepresented funders. As part of this discussion, the Committee will continue exploring ways to address the challenges facing emerging fund managers.
Speakers:
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- Ashok Kamal, Executive Director, NuFund Venture Group
- Sara Zulkosky, Co-Founder & Managing Partner, Recast Capital
12:45 Break
1:45 Understanding the Challenges Faced by Small Public Companies Not Listed on a National Securities Exchange
Small public companies (i.e., companies with a market capitalization of $250 million or less) represent almost half of all public companies. However, many small public companies are not listed on a national securities exchange. Understanding the decision-points and challenges those companies face is critical to fostering access to capital for, and investor participation in, these smaller public companies. To facilitate the discussion, members will hear from the general counsel for a non-national securities exchange. The Committee will begin exploring ways to address some of the challenges facing small public companies.
Speaker:
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- Dan Zinn, General Counsel and Chief of Staff, OTC Markets Group
3:30 Wrap-up and Adjournment