The public markets are showing signs of renewed momentum. According to the Securities and Exchange Commission, the first half of 2026 saw 208 IPOs raise $137.9 billion, compared with 180 IPOs raising $27.7 billion during the same period in 2025—an increase of approximately 16% in the number of IPOs and approximately 398% in IPO proceeds. At the same time, however, periods of market volatility and continued economic and geopolitical uncertainty have complicated IPO execution and, in some cases, led issuers to defer offerings.

Against this backdrop, SEC Chairman Paul Atkins has advanced a “Make IPOs Great Again” agenda aimed at reducing regulatory barriers to becoming and remaining a public company. If adopted, several of these reforms could improve the IPO exit calculus for private equity sponsors.

Greater Flexibility for Post-IPO Sponsor Sell-Downs

In May, the SEC proposed amendments to the rules and forms governing registered securities offerings. These proposed amendments are intended to enable a significantly broader universe of public companies to access Form S-3 “shelf registration” and the capital markets efficiencies that it provides. The proposed changes would allow issuers to register securities in advance of a transaction and, for issuers eligible to file automatically effective registration statements, to access the market without waiting for SEC staff review or a declaration of effectiveness. For sponsors, expanded and earlier access to shelf registration could facilitate more efficient post-IPO sell-downs and provide greater flexibility to quickly capitalize on favorable market conditions amid periods of market volatility.

Under the proposed amendments, U.S. issuers generally would become eligible to use Form S-3 immediately following an IPO, eliminating several existing eligibility requirements, including the 12-month seasoning period. The amendments would also eliminate Form S-3’s transaction requirements, allowing nearly all U.S. issuers to use Form S-3 for shelf offerings in unlimited amounts. The proposal would also replace the current “well-known seasoned issuer” (WKSI) framework for domestic issuers with new “eligible listed issuer” (ELI) and “seasoned eligible listed issuer” (SELI) categories. This move would extend many of the registration and communications benefits currently reserved for WKSIs to a broader universe of exchange-listed issuers.

If the proposal is adopted, the SEC estimates that approximately 74% of existing U.S. Exchange Act reporting issuers would be eligible to file automatically effective shelf registration statements compared with 36% currently. In addition, nearly all U.S. Exchange Act reporting issuers would be able to use Form S-3 for shelf offerings in unlimited amounts, compared with 61% currently. For sponsors, the practical effect could be much shorter lead times and greater flexibility to execute sell-downs as market windows emerge.

The SEC has also proposed reforms intended to reduce certain compliance burdens associated with being a public company, particularly during the years immediately following an IPO.

In May, the SEC proposed extending the reduced disclosure obligations and other accommodations currently available to emerging growth companies and smaller reporting companies to a broader range of seasoned and mid-sized public companies. Under the proposal, a newly public company generally would not become a large accelerated filer until it had at least $2 billion in public float and had been an SEC reporting company for at least five years, effectively providing a minimum five-year “IPO on-ramp.” Currently, large accelerated filer status is based on public float alone.

Companies classified as non-accelerated filers would benefit from reduced disclosure obligations and other accommodations currently only available to emerging growth companies and smaller reporting companies, including an exemption from the requirement to obtain auditor attestation regarding internal control over financial reporting. Non-accelerated filers would also be exempt from certain executive compensation disclosure and shareholder advisory vote requirements, including requirements to provide compensation discussion and analysis, pay-versus-performance disclosure or CEO pay ratio disclosure and to hold say-on-pay, say-on-frequency and say-on-golden-parachute advisory votes. These filers could also limit compensation disclosure for a smaller group of named executive officers and limit summary compensation table disclosure to two fiscal years and omit several other compensation tables.

Other elements of the SEC’s agenda similarly seek to reduce the ongoing burdens of public company status. For example, the SEC has proposed allowing public companies to elect semiannual rather than quarterly reporting.

Separately, the SEC is considering amendments to streamline executive compensation disclosure under Item 402 of Regulation S-K more generally for all filers. Potential changes signaled by Chairman Atkins include reducing the number of executives for whom compensation disclosure is required and simplifying pay-versus-performance disclosure. Depending on its scope, this initiative could reduce ongoing compliance burdens for portfolio companies that ultimately become large accelerated filers.

Beyond these SEC initiatives, the New York Stock Exchange has proposed extending from one year to five years the transition period for newly listed companies to establish an internal audit function. If approved, that change could further reduce the compliance burdens associated with the transition to public company status.

For private equity sponsors, a longer IPO on-ramp and broader public company accommodations could reduce some of the compliance costs and management burdens associated with public company status during a period when the sponsor may continue to hold a significant stake.

Rethinking the IPO Process

In addition to proposed changes to post-IPO requirements, Chairman Atkins has identified potential reforms to modernize the IPO process itself, although these initiatives remain conceptual and have not yet been reflected in formal SEC rule proposals. Among other things, he has called for simplifying what he described as the “spider web” of Securities Act communication rules to better reflect modern communications practices, as well as encouraging innovation in how companies access the public markets, including alternatives to the traditional firm-commitment underwritten IPO.

For PE sponsors, these initiatives, taken together, have the potential to alter the IPO exit calculus at each stage: simplifying the process of going public, reducing certain costs and burdens of remaining public and providing greater flexibility to monetize a retained stake over time. The proposals remain subject to change, and valuation, market conditions and execution certainty will continue to drive exit decisions. But against a backdrop of renewed IPO activity, the SEC’s broader effort to reduce regulatory friction throughout the public company life cycle could make the IPO a more attractive and flexible exit alternative for PE sponsors.

Private Equity Report Fall 2026, Vol 26, No 3