The SEC's Division of Economic and Risk Analysis (DERA) recently produced a Report to Congress regarding the impacts of the Dodd-Frank Act on access to capital for consumers, investors, and businesses, and market liquidity. Although the Report is principally focused on liquidity, it does provide some interesting statistics regarding the primary issuance of equity securities.
The Report notes that total capital formation from 2010 when the Dodd-Frank Act was enacted through year-end 2016 was approximately $20.2 trillion, of which $8.8 trillion was raised through registered offerings, and $11.38 trillion was raised in exempt offerings. The report notes the substantial increase in reliance on exempt offerings. Regulation D offerings have more than doubled since 2009. However, the report notes that the amount sold in reliance on Rule 506(c) represented only 3% of the amount sold in reliance on Rule 506. The average amounts raised in initial Rule 506(c) offerings is much smaller than the average amount reported sold in Rule 506(b) offerings. Rule 144A issuances remain stable.
The Report also provides data regarding Regulation A and crowdfunded offerings, and may be accessed here: https://www.sec.gov/files/access-to-capital-and-market-liquidity-study-dera-2017.pdf.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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