A bill designed to enhance the competitiveness of U.S. markets and stave off the challenge for U.S. initial public offerings from London’s Alternative Investment Market and the Toronto Stock Exchange, passed a committee vote today.


Bipartisan legislation to allow exchanges to establish developmental tiers to expand listing opportunities in the U.S. for smaller companies passed the House Financial Services Committee by voice vote. Under the bill, all securities listed on a developmental tier would be subject to Securities and Exchange Commission oversight and state blue-sky regulations in an effort to uphold investor protections.

The sponsoring Congressmen said the legislation is aimed at reversing a trend of overseas exchanges like the TSX and the London AIM from recruiting U.S. IPOs.

One of the sponsors of the bill, Congressman Vito Fossella said, “The inability to develop an additional, developmental tier can be a significant impediment to an exchange’s ability to compete in the global marketplace. These barriers make our markets less competitive for small cap listings and can drive companies to list outside the United States. This legislation will help ensure an even playing field for all domestic exchanges to compete in a global marketplace. It would also enhance investor protection by strengthening oversight of these companies.”

Added co-sponsor, Congressman Gregory Meeks: “The US capital markets are the strongest and most efficient in the world. However we cannot rest on our laurels as other nations naturally seek to develop their own markets and make them more globally competitive.”

“London is major economic centre and our closest competitor,” said Meeks. “Their Alternative Investment Market is attracting capital worldwide. The U.S. must take the necessary steps to maintain our capital markets as the premiere choice for companies big and small worldwide.”