Summary of H.R. 3395: Middle Market IPO Cost Act

Overview

The Middle Market IPO Cost Act is a bill introduced in the U.S. House of Representatives on May 14, 2025. The bill aims to reduce the financial barriers and costs associated with initial public offerings (IPOs) for middle-market companies, defined as those with a market capitalization between $300 million and $2 billion.

Key Provisions

The main provisions of the Middle Market IPO Cost Act include:

1. SEC Fee Waiver: The bill would require the Securities and Exchange Commission (SEC) to waive registration fees for middle-market companies conducting an IPO. This fee waiver would apply to the company's registration statement filing and any amendments.

2. Underwriting Cost Reductions: The legislation directs the SEC to establish regulations that would limit the underwriting fees and commissions charged by investment banks for middle-market IPOs. The goal is to reduce the overall cost of going public for these companies.

3. Reporting Requirements: The bill mandates the SEC to submit an annual report to Congress on the impact of the fee waivers and underwriting cost reductions, including the number of middle-market companies that have gone public and the average cost savings realized.

Potential Impact

The Middle Market IPO Cost Act is intended to encourage more middle-market companies to pursue public offerings by lowering the significant financial barriers they often face. This could lead to:

• Increased access to public capital markets for growing, middle-sized businesses
• More investment opportunities for public market investors
• Greater economic activity and job creation as middle-market companies expand

However, the bill's ultimate impact will depend on how the SEC implements the fee waivers and underwriting cost reductions, as well as the overall market conditions and investor demand for middle-market IPOs.

Next Steps

The bill has been received in the Senate and referred to the Committee on Banking, Housing, and Urban Affairs for further consideration. If passed by Congress and signed into law, the provisions of the Middle Market IPO Cost Act would take effect 180 days after enactment.