On July 21, 2025, the House of Representatives (the “House”) passed five bills relating to capital formation, in particular affecting small entities and emerging growth companies (“EGCs”). As discussed in a previous post, these bills were reported to the House by the House Committee on Financial Services. Each bill was passed by unanimous voice vote, indicating bipartisan support and is summarized below:

  • H.R. 1469, the Senior Security Act of 2025, would establish the Senior Investor Taskforce (the “Taskforce”) within the SEC. The Taskforce would issue reports on topics relating to investors over age 65, including (but not limited to) industry trends and pertinent issues impacting such investors. This would also enable the Taskforce to take recommendations for legislative and/or regulatory actions that address problems encountered by senior investors. In addition, this act provides that the Government Accountability Office must report on financial exploitation of senior citizens.
  • H.R. 3339, the Equal Opportunity for All Investors Act of 2025, would allow an individual to qualify as an “accredited investor” by passing an examination established by the SEC and administered by FINRA. This bill had been introduced by a bipartisan group comprising U.S. Representatives M. Flood (R-NE), C. Fields (D-LA), M. Lawler (R-NY), S. McBride (D-DE), and S. Thanedar (D-MI) in May 2025.
  • H.R. 3343, the Greenlighting Growth Act, would establish that an EGC, as well as any issuer that went public using EGC disclosure obligations, would only need to provide two years of audited financial statements even when such EGC acquires another company.
  • H.R. 3382, the Small Entity Update Act, would direct the SEC to conduct a study, followed by a rulemaking consistent with the results of such study, to define “small entity” under the Regulatory Flexibility Act (the “RFA”). Currently, the RFA requires federal agencies to consider the impact of regulations on small entities (including small businesses, small governmental units and small non-profit organizations). The RFA would mandate that agencies conduct regulatory flexibility analyses, explore less burdensome alternatives and explain their choices, especially when a particular rule is expected to have a significant economic impact on a substantial number of small entities.
  • H.R. 3395, the Middle Market IPO Underwriting Cost Act would require the Comptroller General, in consultation with the SEC and FINRA, to study and report on the costs encountered by small- and medium-sized companies when undertaking IPOs.

In what may be indicative of the Securities and Exchange Commission’s renewed focus on small business capital formation, one of the topics that the staff (the “Staff”) of the Commission’s Division of Corporation Finance (the “Division”) is focusing on is the Regulation A exemption from registration.  Notably, on June 30, the Division issued a no-action letter in which it agreed that it would not recommend enforcement action against a Regulation A issuer, BirchBioMed Inc. (“BirchBioMed”), in connection with terminating its Regulation A reporting obligations under the specific circumstances outlined below.

Under Rule 257(b) of Regulation A, Regulation A issuers are required to file annual, semi-annual and current reports.  Pursuant to Rule 257(d), an issuer can suspend its reporting obligations if it (i) has fewer than 300 shareholders of record and (ii) has filed all reports required to be filed since it became a Regulation A reporting company, provided that suspension of reporting obligations is not available to issuers during the fiscal year in which a Tier 2 offering statement is qualified or if an annual report for the fiscal year in which a Tier 2 offering statement was qualified has not been filed.

BirchBioMed’s offering statement on Form 1-A in connection with a Tier 2 Regulation offering was qualified in October 2024, and BirchBioMed became subject to Rule 257(b)’s ongoing reporting requirements.  In April 2025, BirchBioMed concluded that its previously-issued financial statements could no longer be relied upon, and commenced a rescission offer for the shares sold in the Regulation A offering.  Following the rescission offer, there were no securities issued pursuant to Regulation A outstanding, and all funds had been released from escrow and returned to investors. 

 In June 2025, BirchBioMed was up-to-date in its reporting obligations and had fewer than 300 shareholders of record, and would have been eligible to cease reporting but for the fact its offering statement was qualified in its current fiscal year ending September 30, 2025 and it had not filed an annual report for such fiscal year.

In its letter to the Staff, BirchBioMed pointed out that, because there were no securities issued pursuant to Regulation A outstanding, there were no public policy considerations, such as providing information to investors and the market, that would be furthered by ongoing reporting, and the benefits of such reporting did not outweigh the burdens of filing.  The Staff agreed that it would not recommend enforcement action if BirchBioMed filed a Form 1-Z to terminate its reporting obligations before the due date of its next semi-annual report.  This outcome is consistent with Securities Act Rules Compliance and Disclosure Interpretation 182.16, which permits a Tier 2 issuer to withdraw an offering statement prior to making any sales, even if the issuer has not filed an annual report for the fiscal year in which the offering statement was qualified.  In both cases, there were no outstanding Regulation A securities, such that there were no investor protection concerns warranting continued reporting.

In other evidence that Regulation A is coming to the Staff’s attention, in its upcoming July 22 meeting, the Small Business Capital Formation Advisory Committee (the “Committee”) plans to discuss potential regulatory improvements to Regulation A, continuing the conversation from its May meeting.  Notably, the Committee’s agenda also includes a discussion of finders, or “persons who assist companies with limited capital-raising activities in private markets.”  The Committee, which is intended to help promote small business capital formation, plans to focus on “access to capital for founders who are building businesses outside of prominent entrepreneurial hubs or without robust capital-raising networks.” 

While the Staff is under no obligation to consider the Committee’s recommendations, it is interesting that the Committee is choosing to revisit the discussion of Regulation A when it is clearly a focus for the Staff, too.  We plan to monitor this area for potential future developments.

Read the no action letter here, the incoming letter here, and the announcement about the July Committee meeting here.

What are the key drivers for reform?

The UK Treasury (“HMT“) noted the following as drivers for reform:

  • A key challenge for private companies is that, at early stages in their growth, there are no standardised ways for shareholders to realise their gains (e.g., where their shares have increased in value) or to allow companies to rationalise their shareholder base by providing their early investors an exit route.
  • Similarly, it is harder for investors to access companies that are not yet operating on public markets.
  • At present, there is also no practicable mechanism for private companies to have their shares admitted to trading on a multilateral system, with disclosure obligations applying only during those intermittent windows.
  • Furthermore, existing arrangements in the UK do not allow private companies to, for example, decide when their shares may be traded, who is allowed to buy the shares, the price at which the shares are traded and who may receive information about the company or transactions in its shares.
  • The PISCES regulatory framework will establish a hybrid regulatory regime that incorporates elements from public markets such as multilateral trading and elements from private markets such as greater discretion for private companies over the trading of their shares. This will enable PISCES platforms to provide investors with concentrated liquidity in private company shares and provide private companies with easier access to new investors seeking to allocate capital to successful growing businesses.

Further, the FCA has stated that: “PISCES could be an innovative, flexible, efficient and effective solution for private companies to provide investors and employees with concentrated liquidity events in which to buy and sell shares. It should enable private companies to reach a broader range of investors, strengthening their capital-raising prospects outside of PISCES, achieve their growth aspirations and support their potential future transition to public markets“. 

What are the proposed regulatory requirements?

PISCES is a new type of share trading platform which a FCA authorised firm can apply to operate to trade the shares of private companies in secondary markets. It allows buyers and sellers (in or outside the UK) of shares in private companies to trade those shares during intermittent trading periods.

The rules for the PISCES sandbox are set out in the Private Intermittent Securities and Capital Exchange System (PISCES) Instrument 2025 which will form part of the FCA Handbook.

The key features of PISCES will be as follows:

  • As a secondary market, it will facilitate the trading of existing private company shares for UK or overseas companies. It cannot be used for primary issuance e.g. for initial public offerings.
  • The FCA has created a new and bespoke disclosure and transparency regime for private companies whose shares are traded on a PISCES platform. Private companies whose shares are traded on a PISCES platform may be liable to investors who suffer losses arising from misleading information disclosed by that company in connection with a trading event or period.
  • PISCES operators will be able to decide whether or not shares must be recorded into a central securities depository (e.g. Euroclear).
  • Only shares in private companies whose shares are not currently admitted to trading on a public market (in the UK or overseas) can be traded on PISCES.
  • Private companies incorporated outside of the UK can use a PISCES platform as a trading venue for its shares to be traded, but will also need to consider the impact of this on local laws that apply in its jurisdiction of incorporation (e.g. regarding disclosure to investors on a PISCES platform).
  • Operators of a PISCES platform can determine any admission requirements for their proposed market, including any minimum corporate governance requirements for private companies whose shares are traded.
  • During intermittent trading events, financial intermediaries (like brokers) will act as a bridge between investors and a PISCES platform. They will connect investors to a PISCES trading platform by (i) placing their buy and sell orders and (ii) promoting PISCES shares. Promotion and marketing of PISCES shares will need to comply with the UK financial promotion regime.
  • Trading on PISCES will be intermittent. It must be occasional, infrequent and for a limited time period. Operators running each PISCES platform will decide when intermittent trading events take place and how long they last for.
  • Companies can choose PISCES platforms that offer trading events that suits their needs.
  • Companies will have discretion on (a) when the shares may be traded (b) who is allowed to buy the shares (c) the price at which the shares are traded and who gets information about the company and (d) any transactions in its shares, subject to their PISCES operator’s business model and FCA rules.
  • Only certain categories of investors will be able to trade on PISCES. These include (a) professional clients as defined under MIFIR; (b) those who meet the definitions of self-certified sophisticated investors, sophisticated investors, and high net-worth investors based upon the FSMA 2000 (Financial Promotion Order) 2005 (FPO); (c) employees of participating companies and those providing consultancy and managerial services; and (d) trustees of share incentive plans and employee benefit trusts. 
  • Most retail investors are prohibited from trading on a PISCES platform.
  • A PISCES platform may not facilitate the trading of options, or other derivative products.
  • The FCA rules prohibit financial intermediaries from enabling PISCES companies using a platform for buybacks.
  • To apply to the FCA for permission to operate a PISCES platform, FCA regulated firms will need to have either Part 4A permissions under the Financial Services and Markets Act 2000 (“FSMA“) to (a) arrange deals in investments, (b) operate an multilateral trading facility, or c) operate an organised trading facility (OTF) or be a Recognised Investment Exchange as defined under FSMA 2000.
  • Financial intermediaries have an obligation to check the eligibility of a potential UK investor when taking an order to purchase. The requirement to undertake an eligibility check will fall on the firm who is interacting with the end client, whether that firm is a regulated intermediary (e.g., a broker or investment bank), or the operator of a PISCES platform where there are no intermediaries involved on the PISCES platform.
  • PISCES will not be an multilateral trading facility (MTF) or trading venue as defined under UK MIFIR. The transparency requirements for shares traded on a trading venue will therefore not apply by default to PISCES operators. The FCA have instead been granted rule-making powers to set bespoke requirements for pre- and post-trade transparency information on PISCES.

Who is impacted by these regulatory reforms?

The PISCES arrangements affect:

  • FCA authorised firms who apply to become an operator of a PISCES platform.
  • Financial intermediaries (brokers) intending to place buy or sell orders on a PISCES platform.
  • Investors in private companies intending to participate in trading on a PISCES platform (including shareholders looking to exit their investments e.g. US private equity firms).
  • Private companies whose shares will be traded on a PISCES platform.

What are next steps?

The Private Intermittent Securities and Capital Exchange System (PISCES) Instrument 2025 came into force on 5 June 2025 as a regulatory sandbox initiative.  The FCA will set up, operate, and supervise the PISCES regulatory regime, and will have rulemaking powers over persons participating in the regime. The FCA can make new rules, modify existing rules, or direct how and to whom existing rules may apply or be waived, as it considers necessary or expedient to operate and supervise the regime.

PISCES platforms will be operated initially for a period of up to five years, until 5 June 2030, with the possibility of extension by the Treasury when it has had the opportunity to assess the legislation’s intended outcomes.

Sustainable debt issuances by Brazilian companies in both domestic and international markets have steadily increased. Abroad, the combined volume of green, social, and sustainability bonds issued by Brazilian corporates, financial institutions, and the federal government rose from approximately USD 15.5 billion in 2023 to approximately USD 17.6 billion in the first nine months of 2024. Domestically, the aggregate issuance of sustainable debentures has also continued to rise, reaching a record BRL 94.5 billion (approximately USD 19 billion) in green debenture issuances in 2024, exceeding the previous record set in 2021 by more than 30%. Brazil has also recently emerged as a regional leader in the issuance of blue bonds (e.g., use-of-proceeds bonds dedicated to financing the conservation of marine and freshwater ecosystems). Although this category still accounts for a small share of total labeled debt globally, blue bonds gained notable traction in 2024, with Latin America – and Brazil in particular – standing out. These trends reflect rising global demand for sustainable investments and demonstrate that the Brazilian market is evolving to take advantage of these funding opportunities.

Continue reading here.

Webinar | July 14, 2025

3:00 p.m. – 4:00 p.m. ET

Register here.

Insurance companies have been busily accessing the capital markets in 2024 and in 2025 with traditional debt offerings, as well as with hybrid capital and structured solutions, including P-CAPs and funding-agreement backed notes (FABNs) transactions. In fact, the volume of FABN issuance is on track to outpace that of the last few years.  Insurance companies must take into account legal and regulatory considerations in evaluating their funding and capital-raising alternatives. During this session hosted by PLI, we will consider these as we discuss the following:

  • Short-term funding, including commercial paper;
  • Term funding, including senior and subordinated debt;
  • P-CAPs and why an insurance company would choose to rely on contingent funding alternatives;
  • Surplus notes and the distinct regulatory considerations;
  • FABNs as well as funding agreement backed repo; and
  • Securities offering methodologies.  

On July 4, 2025, the “One Big Beautiful Bill Act” (OBBBA) became law. The OBBBA makes significant changes to domestic and international tax provisions, including provisions addressing bonus depreciation, research and experimental (R&E) expenditures, the limitation on interest deductibility under Section 163(j), state and local tax (SALT) deductions, expansion of the qualified small business stock (QSBS) benefits, as well as changes to the global intangible low-taxed income (GILTI), foreign-derived intangible income (FDII), base erosion anti-abuse tax (BEAT) and controlled foreign corporation (CFC) rules. We highlight the key domestic and international tax changes in this Legal Update.

Continue reading here.

On July 1, 2025, the staff of the Division of Corporation Finance at the U.S. Securities and Exchange Commission (the “SEC”) issued another in a series of statements regarding crypto assets. This particular statement, titled “Crypto Asset Exchange-Traded Products,” (the “Statement”) details how certain disclosure requirements under the federal securities laws apply to offerings and registrations of securities by issuers of crypto asset exchange-traded products (“crypto asset ETPs”).  The Statement applies to crypto asset ETPs with the following characteristics:

  • Investment products listed and traded on national securities exchanges, but not registered as investment companies under the Investment Company Act of 1940;
  • Typically structured as trusts that hold spot crypto assets or derivative instruments that reference crypto assets, and such trusts issue securities and register their offerings and securities under the Securities Act of 1933, as amended (“Securities Act”) and Securities Exchange Act of 1934, as amended (“Exchange Act”), as applicable; and
  • Issuers are subject to the anti-fraud provisions of the federal securities laws.

The Statement addresses common questions and issues arising under the disclosure obligations of the federal securities laws when crypto asset ETP issuers register securities offerings under the Securities Act or classes of securities under the Exchange Act, as follows:

Document SectionRequirementsStaff Observations or Best Practices
Registration Statement Cover PageProvide information related to the offering, including the offering price, the nature of any underwriting arrangements and the name(s) of the underwriter(s).Disclosure of the initial offering price of the securities is required. Also identify the initial authorized participant (an “AP”) or initial purchaser as a statutory underwriter.
Prospectus SummaryProvide a summary in plain English of the information in the prospectus where the length or complexity of the prospectus makes a summary useful.Identify and highlight the most significant aspects of the offering in clear, plain language, such as clear descriptions of (i) investment objectives and tracking index/benchmark it plans to reference; (ii) underlying crypto asset(s) and associated network(s); (iii) policies regarding the management of and incidental rights associated with underlying crypto asset(s); and (iv) that the amount of underlying crypto assets per share held by the trust will decline over time as crypto assets are sold to pay trust fees and expenses.
Risk FactorsDiscuss specific and unique material factors that make an investment in the issuer and product speculative or risky.Disclosure will vary based on the nature of the security, the issuer’s business, underlying crypto asset(s), tracking index or benchmark, and, if material, may include factors such as the characteristics of the security, limited rights of holders, insurance coverage, valuation and liquidity risks, technological risks, cybersecurity risks, and legal, regulatory and tax risks.
Description of Business — The Trust, Crypto Asset Prices, and Calculation of NAVProvide a narrative description of material aspects of the issuer’s business.Provide clear, understandable disclosure regarding the trust’s assets, including characteristics of the underlying crypto asset(s), and describe the applicable index or benchmark methodology and the methodology used to calculate net asset value.
Description of Business –Trust Service Providers, Custody of Assets, and Fees and ExpensesProvide information material to understanding the issuer’s business, including the extent that such business is materially reliant on third parties.Issuers generally rely on the services of a sponsor and third-party service providers, including crypto asset custodians, and disclose fees and expenses payable to the sponsor and such third-party service providers.  Issuers must file (i) material contracts not made in the ordinary course of business and (ii) ordinary course contracts on which they are substantially dependent, as exhibits to a registration statement.
Description of Securities  Describe the issuer’s securities.  Disclose the circumstances under which shareholders have voting rights, including any limitations or restrictions; if the rights of holders may be modified other than by at least a vote of a majority of shares outstanding; and how shareholders will be notified of material amendments to or termination of the trust agreement.
Plan of DistributionDisclose the plan distribution of securities offered and sold in a registered offering.  Issuers conducting delayed or continuous offerings under Securities Act Rule 415 must undertake to include related material information that was not previously disclosed in an effective registration statement.Disclosure should address (i) the mechanics of the creation and redemption process between the trust, the APs, the custodian(s), and third-party service providers; (ii) if creation and redemption orders will be settled onchain or offchain and related risks; (iii) potential impacts on the arbitrage mechanism from price volatility, trading volume, and price differentials across trading platforms; and (iv) whether and when the sponsor may suspend creation and redemption orders and notification mechanisms.
ManagementDisclose information relating to the identity and experience of the issuer’s executive officers, directors, and certain significant employees, including persons who do not hold formal positions as executive officers or directors but who perform similar functions.  Crypto asset ETPs typically have a sponsor whose directors and executive officers perform functions similar to those of a board of directors and executive officers for the trust. To the extent that a sponsor performs policy-making functions, disclose information with respect to directors, executive officers, or other employees of the sponsor performing such functions.  Disclosure regarding executive compensation of the issuer is not applicable in this situation; however, some issuers have disclosed fees paid to the sponsor or third party for performing such functions.
Conflicts of InterestDisclose material information about transactions with related persons, and policies and procedures related to the review, approval, or ratification of transactions with related persons. .Issuers have disclosed (i) existing and potential conflicts of interest between the sponsor and its affiliates and the trust, including if the sponsor or insiders hold the underlying crypto asset(s) or have related exposure that could create conflicts of interest; (ii) whether the trust requires pre-clearance of transactions in underlying crypto asset(s); and (iii) the sponsor’s experience sponsoring other exchange-traded products and in crypto asset markets.
Financial StatementsDisclose financial statement information in accordance with Regulation S-X.For issuers organized as statutory trusts or limited partnerships that are registering the offer and sale of beneficial units or limited partnership interests in multiple series, the trust or partnership should be treated as the sole registrant, not the individual series.  However, issuers should provide, for the sole registrant and for each series: (i) separate financial statements and audit reports; (ii) separate interim financial statements; and (iii) separate assessments of materiality for Regulation S-K and Regulation S-X.
Filing Fee TablesDisclosure must be correctly “tagged” on EDGAR to prevent issues with future filings and payment of fees.When registering the offering of an indeterminate number of exchange-traded vehicle securities in reliance on Securities Act Rules 456(d) and 457(u), the EDGAR fee tag for “Type of payment” is “2” and the EDGAR “Security type” is “Exchange-Traded Vehicle Securities.” Failure to include these tags may prevent the issuer from being able to file a form of prospectus under Securities Act Rule 424(i) and pay its registration fee after the end of any fiscal year during which it has publicly offered securities.

Read the full text of the Statement here.

Webinar | July 17, 2025
10:00 a.m. – 10:45 a.m. EDT
Register here.

On June 6th, the NAIC proposed a sweeping redesign of insurance investment regulation—the most significant shift in over 30 years. Aimed at addressing the rise of private, structured, and complex assets in insurer portfolios, the changes could have broad implications for risk-based capital (RBC) requirements and the use of credit rating providers (CRPs).

Highlights include a reorganization of the Valuation of Securities (E) Task Force and the formation of the new Investment Analysis (E) Working Group and Credit Rating Provider (E) Working Group. Though still under review, these reforms could reshape insurer strategies and compliance expectations.

Join S&P Global and Lawrence Hamilton, Partner at Mayer Brown, for an in-depth walkthrough of the proposed changes, including restructured task forces, the evolving role of CRPs, and anticipated market impacts. A live Q&A will follow the session.

Domestic debt issuance is a widely used funding tool for Brazilian companies and is largely dominated by debentures. Brazil’s fixed income market has expanded significantly, with companies issuing hundreds of billions of Brazilian reais (BRL) in recent years. On the other hand, despite the undisputed dominance of debentures as the preferred funding domestic tool, international bonds have also served as a complementary—and, in some cases, alternative—funding option for Brazilian issuers. In the first quarter of 2025, Brazilian companies issued USD 11.1 billion in international bonds in 12 deals—the highest first quarter volume since 2014. In 2024, Brazilian issuers raised approximately USD 21 billion through international bond issuances, surpassing the USD 16.1 billion raised in 2023 and reflecting a continued increase from USD 10.7 billion in 2022. These numbers highlight a clear and consistent upward trend in international bond issuance by Brazilian companies.

This article provides a practical comparative analysis of the key factors that companies should consider when choosing between issuing debentures locally and issuing bonds internationally, with a focus on the regulatory framework applicable in Brazil and in the U.S. and European markets.

Continue reading here.

Last week, the US federal banking regulators proposed changes to the enhanced supplementary leverage ratio (“eSLR”) requirement for US global systemically important bank holding companies (“US GSIBs”). This proposal is intended to reduce the likelihood of the eSLR requirement being the binding capital constraint for US GSIBs and, thereby, enhance the ability of US GSIBs to hold low-risk assets. A key policy objective of the Proposal is to bolster the resiliency of the US Treasury market. The US federal banking regulators also requested comments on exempting certain US Treasury securities from the supplementary leverage ratio (“SLR”) requirement that applies to US GSIBs and Category II and III banking organizations.

Continue reading our Legal Update.