H.R. 3381: Encouraging Public Offerings Act of 2025

This bill, titled the Encouraging Public Offerings Act of 2025, aims to amend existing securities regulations to facilitate and encourage public offerings by companies. The proposed changes primarily affect the processes surrounding initial public offerings (IPOs) and the submission of registration statements to the Securities and Exchange Commission (SEC).

Key Provisions of the Bill

1. Expanding 'Testing the Waters'

The bill amends the ability for companies to engage in “testing the waters” communications. This means that companies looking to go public will have broader permission to communicate with potential investors about their plans and solicit interest before the formal registration of securities. Specifically:

• It enables any issuer (not just emerging growth companies) to engage in these communications.
• The SEC can establish regulations regarding the conditions under which these communications can occur, ensuring proper oversight and compliance.
• Before the SEC can implement any new rules related to this, they must first submit a report to Congress justifying the need for such rules.

2. Confidential Review of Draft Registration Statements

The bill modifies the process for companies wanting to confidentially submit draft registration statements to the SEC. The changes are as follows:

• Companies will be allowed to confidentially submit drafts of their registration statements for a nonpublic review before any official filing.
• Drafts must be publicly filed with the SEC a set period before the expected effective date of the registration.
• For an IPO: 10 days before the effective date.
• For initial security registration: 10 days before listing.
• For follow-on offerings: 48 hours before the effective date.
• Similar to testing the waters, the SEC will have the authority to set additional terms and conditions for these submissions, which will also require a justification report to Congress before implementation.

Overall Goals

The primary goal of this bill is to simplify and enhance the process for companies seeking to go public, thereby fostering an environment that encourages more businesses to offer shares to the public. By expanding options for communications and providing a route for confidential submissions, the bill seeks to reduce barriers for companies in raising capital through public markets.

Relevant Companies

• LYFT (Lyft, Inc.): As a company that may consider public offerings for future expansions or capital raises, the ability to confidentially submit registration statements could streamline its public fundraising efforts.
• POST (Post Holdings, Inc.): This company might benefit from the expanded testing the waters provision to gauge investor interest before official offerings.