The number of publicly traded companies in the United States has fallen by roughly half since the mid-1990s, from more than 8,000 to about 4,000 today. Regulators have blamed the decline on the rising cost of being public, and this week the Securities and Exchange Commission proposed its most ambitious response in a generation.
The SEC laid out a strategy it says will “revitalize the public markets and make the IPO the financing choice of first resort for companies again,” in the words of Chairman Paul S. Atkins, who has branded the effort “Make IPOs Great Again.” The commission formally established the goal this week and backed it with two proposed rulemakings.
The first proposal, on registered offering reform, would make the streamlined Form S-3 available to significantly more issuers, expand the ability of companies to incorporate information by reference into their S-1 registration statements, and ease restrictions on communications between issuers and investors during the offering process. The second would enhance accommodations for emerging growth companies and simplify the rules governing which companies must file periodic reports with the commission.
Taken together, the changes would cut the time, cost and legal exposure of going public, securities lawyers said. The proposals build on earlier SEC moves, including optional semiannual reporting for some companies and looser rules for smaller issuers, part of a deregulatory push under Atkins that began when he took office last year.
The stakes are large. The number of IPOs has been thin since the boom year of 2021, and the companies that have chosen to stay private have grown enormous. Private capital markets held roughly $8.5 trillion in assets last year, according to McKinsey, giving startups access to funding without the scrutiny that public listing brings. The average age of a company at IPO has crept up, and the technology giants of the current era, including the largest AI companies, remain firmly in private hands.
The commission’s proposals are designed to change that calculus. For small and mid-sized companies, the expanded S-3 access would let them raise capital more quickly after listing, while the incorporation-by-reference changes would reduce the burden of preparing lengthy disclosure documents. For larger companies, the relaxed communication rules would let executives talk to investors during the offering window without tripping over the securities laws.
Supporters say the timing matters. The IPO market has been cautiously reopening, with AI, space, fintech and defense companies leading the way, but activity remains concentrated among a narrow group of large issuers. Eight companies have filed to raise at least $100 million in a single week this spring, the most since 2021, according to Axios, and the window could close as quickly as it opened.
“We support what it proposed,” said Louis Lehot, a partner at Foley & Lardner who advises companies on capital markets transactions and filed a comment letter urging the SEC to act. “In a single month this spring, the commission turned that diagnosis into action.” He called the May agenda the most serious attempt in a generation to reopen the U.S. public markets.
The decline did not happen by accident. Compliance costs under the Sarbanes-Oxley Act, the collapse of sell-side research coverage, the rise of activist investors and the sheer convenience of private capital all pushed companies to stay private longer. The result, economists have argued, is that ordinary investors have been locked out of the fastest-growing companies of the past two decades, while institutions captured the gains in private markets.
Skeptics worry the pendulum has swung too far. Investor advocates argue that eased disclosure and reporting rules could leave shareholders with less information and less protection, and that the commission is deregulating at a moment when retail participation in markets is at record levels. The proposals will now go through a public comment period, with the commission expected to consider final rules later this year.
The SEC’s direction under Atkins contrasts sharply with the approach of his predecessor, Gary Gensler, whose tenure was marked by aggressive rulemaking on everything from climate disclosure to market structure. The current commission has moved to dismantle parts of that agenda while pushing its own, lighter-touch vision of capital formation.
The deeper question is whether regulation alone can revive the IPO market. Bankers say the pipeline depends on after-market performance: the 2026 class of listings must hold their value for the window to stay open, and the companies waiting in line, including several AI giants valued above $100 billion, will watch carefully.
“If the top of the market performs, the window widens,” one technology banker said. “If it stumbles, no amount of deregulation will bring the companies out.”
The comment period will be a test of how much support the agenda commands. Industry groups are expected to file in favor; investor advocates will push for guardrails. Atkins, who has made capital formation the centerpiece of his tenure, has signaled he intends to move quickly, and final rules could come within months.
For now, the commission has done its part. The message to founders is simple: the door to the public markets is being opened, and the SEC wants you to walk through it.
