Greenlighting Growth Act
Sponsors
Legislative Progress
In CommitteeReceived; read twice and referred to the Committee on Banking, …
Passed House (inferred from eh version)
Reported with an amendment, committed to the Committee of the …
Mr. Haridopolos (for himself and Mrs. Wagner) introduced the following …
Summary
What This Bill Does
The Greenlighting Growth Act reduces financial disclosure requirements for emerging growth companies (companies with less than $1.235 billion in annual revenue) when they go public. Specifically, it eliminates the requirement to present financial statements for companies they acquired before their initial public offering (IPO). This exemption continues to apply even after a company grows beyond the "emerging growth company" threshold.
Who Benefits and How
Emerging growth companies preparing for an IPO benefit significantly through reduced compliance costs and faster time to market. They no longer need to compile and audit historical financial statements for companies they acquired before going public, which can save hundreds of thousands of dollars in accounting and legal fees. Investment banks underwriting these IPOs also benefit from a more streamlined process and potentially more IPO business. Legal firms handling IPO disclosures benefit from reduced workload and simpler documentation requirements.
Who Bears the Burden and How
Public investors receive less historical financial information when evaluating newly public companies that have made acquisitions. This increases investment risk, as investors cannot see the full financial history of acquired companies that may represent significant portions of the business. Accounting and auditing firms lose revenue opportunities from fewer required audits and financial statement compilations. Financial analysts and institutional investors have less data available for valuation and due diligence.
Key Provisions
- Amends the Securities Act of 1933 to exempt emerging growth companies from presenting acquired company financial statements for any period before the earliest audited period shown in their IPO filing
- Amends the Securities Exchange Act of 1934 to apply the same exemption to stock exchange listing applications
- Makes the exemption permanent - even after a company loses its emerging growth company status, it is never required to retroactively produce these pre-IPO acquired company financial statements
- Applies to financial statements that would otherwise be required under SEC Regulation S-X (sections 210.3-05 and 210.8-04), which govern acquired business financial statements
Evidence Chain:
This summary is derived from the structured analysis below. See "Detailed Analysis" for per-title beneficiaries/burden bearers with clause-level evidence links.
Primary Purpose
Reduces financial statement reporting requirements for emerging growth companies during and after their initial public offerings by eliminating the need to present acquired company financial statements for periods prior to the IPO.
Policy Domains
Legislative Strategy
"Reduce regulatory compliance costs for emerging growth companies to encourage public offerings and reduce barriers to going public"
Likely Beneficiaries
- Emerging growth companies going public (reduced compliance costs)
- Private equity and venture capital firms (easier exit through IPO)
- Investment banks underwriting IPOs (more attractive IPO market)
- Corporate legal and accounting firms (reduced disclosure work)
Likely Burden Bearers
- Public investors (less historical financial information about acquired companies)
- SEC enforcement (reduced transparency)
- Financial analysts (less data for valuation)
- Institutional investors (reduced due diligence information)
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
Key Definitions
Terms defined in this bill
A company as defined in the JOBS Act with less than $1.235 billion in annual revenue, eligible for reduced regulatory requirements during and for a period after their IPO
The first time a company offers its stock to the public
Financial statements required under section 210.3-05 or section 210.8-04 of title 17, Code of Federal Regulations (SEC Regulation S-X)
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology