Nasdaq Champions Smart Regulatory Reform to Strengthen the World’s Leading Capital Markets and Drive American Economic Growth

Rhea-AI Summary

Nasdaq (NDAQ) has released a comprehensive policy paper titled 'Advancing the U.S. Public Markets: Unlocking Capital Formation for a Stronger American Economy.' The report addresses the concerning 36% decline in U.S. public companies over the past 25 years, from 7,000 to 4,500, while private equity-backed companies have surged by 475% to 11,500.

The paper outlines key recommendations focusing on three main areas:

• Proxy Process Modernization
• Scaled Disclosure Relief
• Leveling the Playing Field with Smart Regulation

These reforms aim to reduce regulatory burdens while maintaining investor protection, addressing issues like proxy plumbing, materiality-based disclosure requirements, and enhanced short selling transparency. The initiative seeks to make public markets more accessible and strengthen America's global market competitiveness.

Positive

• Initiative to reduce regulatory burdens could lower operational costs for public companies
• Proposed reforms could make public markets more attractive for companies considering IPOs
• Enhanced short selling transparency could improve market stability

Negative

• 36% decline in public listings indicates challenging market environment
• Increased regulatory burden affecting company competitiveness
• Current market conditions limiting retail investor access to growth opportunities

New paper presents policy recommendations to improve the public company experience, with the ultimate goal to increase investor access to the growth and success of the US economy

NEW YORK, March 31, 2025 (GLOBE NEWSWIRE) -- Nasdaq today released a comprehensive set of policy recommendations in a paper titled “Advancing the U.S. Public Markets: Unlocking Capital Formation for a Stronger American Economy.” The paper draws insights from a recent survey and ongoing engagement with thousands of Nasdaq-listed companies and advances critical policy proposals to strengthen the public markets and retain the U.S. capital markets’ status as the global standard for economic innovation and wealth creation.

Over the past 25 years, the number of public companies listed on U.S. exchanges has declined 36%, from 7,000 to 4,500, while the number of private equity-backed companies in the U.S. has increased approximately 475%, from 2,000 to 11,500. One of key drivers behind this trend is the increased burden associated with public company status. The decline in the number of public-traded companies is harmful to the overall strength, liquidity, and depth of the U.S. markets. The unjustifiable increase in the burdens and costs that must be borne as the price for the privilege of accessing U.S. public markets has needlessly hampered U.S. companies’ growth, scale, and competitiveness in the global economy. Importantly, it has also limited Main Street Americans from benefiting from the value and wealth creation potential from American innovation.

Nasdaq’s paper recommends pragmatic and results-oriented regulatory changes to restore balance between oversight and accessibility in the public markets. The analysis includes views from companies and argues for proxy process modernization, scaled disclosure with renewed emphasis on materiality, common sense litigation reform, and increased transparency into short selling.

“Nasdaq has long advocated on behalf of our issuers, and the urgency to find solutions to these pain points extends beyond simply maintaining the public company model – it is about America's global competitiveness,” said Nelson Griggs, President of Nasdaq. “Grounded in the principles of liquidity, transparency and accessibility, public markets help democratize wealth creation, giving everyday investors the opportunity to invest in the companies shaping the economy. By making regulatory processes more efficient, we can create an environment where companies once again view going public as a worthwhile and meaningful achievement – one that is not just a milestone for a business, but also an opportunity to power the next chapter of American economic growth.”

Public companies need a more level and predictable regulatory environment—one that is rooted in building value for shareholders, ensuring corporate accountability and investor protection. A modern and appropriately scaled regulatory framework can provide investors with the needed information while allowing companies of all sizes to operate and thrive.

Several key policy priorities identified in the paper to support companies going and staying public are:

• Proxy Process Modernization, including improving proxy plumbing, common sense proxy access and shareholder proposal reforms, and proxy advisory reform.
• Scaled Disclosure Relief, including anchoring disclosure requirements in materiality, streamlining quarterly reporting practices, and updating scaled disclosure for emerging growth companies, accelerated filers, smaller reporting companies and well-known seasoned issuers.
• Leveling the Playing Field with Smart Regulation, including ensuring audits remain relevant and affordable, updating short selling disclosures, and reining in unproductive litigation practices.
  

"Markets evolve over time, and now is the time to rebalance and modernize the regulatory environment that is tilted too heavily toward burdensome oversight and is not enhancing the quality of our public markets or the information that investors receive," said John Zecca, Executive Vice President and Global Chief Legal, Risk and Regulatory Officer at Nasdaq. "Innovators need a more level and pragmatic regulatory environment that is data-driven and results-oriented. If we focus on common sense regulation, simplifying the regulatory burdens on public companies while providing more meaningful information to investors, we will foster stronger capital markets, accelerate job creation, and expand wealth-building opportunities across American society."

For more information about Nasdaq’s policy advocacy efforts: www.nasdaq.com/Elevate

About Nasdaq:
Nasdaq (Nasdaq: NDAQ) is a leading global technology company serving corporate clients, investment managers, banks, brokers, and exchange operators as they navigate and interact with the global capital markets and the broader financial system. We aspire to deliver world-leading platforms that improve the liquidity, transparency, and integrity of the global economy. Our diverse offering of data, analytics, software, exchange capabilities, and client-centric services enables clients to optimize and execute their business vision with confidence. To learn more about the company, technology solutions, and career opportunities, visit us on LinkedIn, on X @Nasdaq, or at www.nasdaq.com.

Media Relations Contact:
Michelle Mendiola
+1.646.634.8350
Michelle.Mendiola@Nasdaq.com

FAQ

What is the current decline rate of public companies on U.S. exchanges according to Nasdaq's report?

According to Nasdaq's report, U.S. public companies have declined 36% over the past 25 years, from 7,000 to 4,500 companies.

How much has the private equity-backed company sector grown compared to public listings?

Private equity-backed companies in the U.S. have increased approximately 475%, from 2,000 to 11,500 companies over the past 25 years.

What are the main regulatory reforms proposed by Nasdaq (NDAQ) in their new policy paper?

Nasdaq proposed three main reforms: proxy process modernization, scaled disclosure relief based on materiality, and smart regulation to level the playing field including updated short selling disclosures.

How does Nasdaq's new regulatory reform initiative aim to benefit retail investors?

The initiative aims to democratize wealth creation by making public markets more accessible, allowing everyday investors to participate in company growth while maintaining investor protection.