Washington, DC — Today, the United States House of Representatives passed a bill authored by Congressman Jim Himes (CT-04) that would require the Government Accountability Office (GAO) to study and report on the cost for small- and medium-sized companies to undertake initial public offerings.

“The JOBS Act did good work to reduce the cost and friction associated with the undertaking of an IPO, but the actual cost of going public has not budged from seven percent in decades,” said Congressman Jim Himes. “That means small- and mid-sized companies hand over millions of dollars to underwriters when they go public – a serious cost for many of these young companies. I strongly believe that this seven percent gross spread is a fair subject for scrutiny, and by examining gross spread and other costs associated with going public, we can better understand where these costs are coming from, what drives them, and what might be done to try to make the IPO market more competitive and reduce costs for companies trying to access our capital markets.”

Congressman Himes introduced H.R. 2812, the Middle Market IPO Underwriting Cost Act, in response to the remarkable stability of the gross spread over the past three decades. From 1992-2017, more than 80% of middle market IPOs had gross spreads of exactly seven percent, and from 2001 – 2022, 95% of United States IPOs that raised between $30 and $130 million had a gross spread of seven percent. Himes’ bill directs the GAO to study the direct and indirect costs of an IPO and analyze how these costs have evolved over time, including fees paid to underwriters, investment advisory firms, and other professions for services in connection with an IPO.

For more information contact nora.kohli@mail.house.gov. A copy of the full bill can be found here.