In a recent article, Edward Knight, the global chief legal and policy officer at Nasdaq Inc., offered his own views on reforms that would contribute to greater resiliency for the US capital markets. Knight suggests that greater retail participation in the stock markets should be encouraged. He looks to Sweden's investment savings accounts, which provide for investments to be made in various securities, with tax liability assessed based on the value of the account, as a means of encouraging more active participation. Knight notes that the introduction of investment savings accounts in Sweden can be shown to have some correlation with an increase in IPO activity. While an interesting idea, it is not clear that we would see more companies choose to go public (rather than remain private and finance at attractive valuations or sell at attractive valuations) if there were a higher retail participation rate or that direct retail participation rather than participation through funds would make a difference. Knight also suggests that Congress and the Securities and Exchange Commission address market structure issues that may impair liquidity for smaller companies. He also recommends more transparency relating to reporting of ownership positions. Knight advocates regulations that would mandate that holders of short positions be subject to reporting. Knight also calls for a merger of the Securities and Exchange Commission and the Commodity Futures Trading Commission into a single agency in order to eliminate regulatory overlaps and redundancies. A number of these reforms have been advanced through proposed bills in prior sessions of Congress. Just this week, the US Senate advanced a handful of capital markets related measures for further consideration. It will be interesting to see whether some of these suggestions find their way into a JOBS Act 3.0.

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2019. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.