Middle Market IPO Cost Act
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Would require the Government Accountability Office to study and report on the costs small- and medium-sized companies face when going public through an initial public offering, examining direct fees, compliance costs, and trends in IPO pricing practices.
What this bill would do
What it would do
The bill would direct the Comptroller General of the United States — the head of the Government Accountability Office — to conduct a study of the costs that small- and medium-sized companies incur when undertaking initial public offerings (IPOs). The study would cover direct and indirect costs such as accountant and underwriter fees, compliance with federal and state securities laws, and other IPO-related expenses. It would also compare IPO costs against alternative financing options, assess the impact on capital formation and retail investor access to public securities, and analyze trends in IPO pricing and the availability of investment research over time.
The bill would not itself change any existing rules or fees, nor would it direct any regulatory action. The Comptroller General would be required to submit a report to Congress — including findings and any administrative or legislative recommendations — within 360 days of enactment. Any policy changes would require separate legislation or regulatory action.
Key provisions
- 1Would direct the Comptroller General, in consultation with the SEC and FINRA, to study direct and indirect costs small- and medium-sized companies face in undertaking IPOs, including accountant, underwriter, and advisor fees and securities-law compliance costs.
- 2Would require the study to compare IPO costs with alternative financing and liquidity options, and assess the impact on capital formation and retail investor access.
- 3Would require analysis of IPO trends over a period the Comptroller General determines appropriate, covering pricing practices, broker participation, investment research availability, and litigation costs.
- 4Would require the Comptroller General to submit a report to Congress with findings, determinations, and any administrative or legislative recommendations within 360 days of enactment.
Who would be affected
Small- and medium-sized companies considering going public, investment banks and underwriters involved in IPOs, retail investors seeking access to public securities of smaller firms, and Congress as the recipient of the GAO's findings and recommendations. The Securities and Exchange Commission and the Financial Industry Regulatory Authority would be consulted during the study.
Why it matters
For smaller companies weighing an IPO, the study could surface concrete data on whether costs are a barrier to going public and how those costs compare to other financing paths. Retail investors could benefit if the findings prompt reforms improving access to small-company public securities. However, the bill itself changes nothing — any practical impact depends on follow-on legislative or regulatory action.
What would change
Agencies directed to act
Effective dates
- GAO report to Congress due within 360 days of enactment
Funding and costs
Congressional Budget Office estimate
CBO estimates H.R. 3395 would cost approximately $1 million over the 2025–2026 period, subject to appropriations, with no effect on direct spending, revenues, or the deficit.
H.R. 3395 would direct the Government Accountability Office (GAO) to study and report to Congress on the costs that small- and medium-sized companies incur when conducting initial public offerings (IPOs). CBO estimates implementing the bill would cost $1 million over the 2025–2026 period, based on the cost of similar GAO activities; that spending would be discretionary (subject to Congress providing appropriated funds) and is not estimated beyond 2030. The bill would have no effect on direct (mandatory) spending or revenues, and CBO found no intergovernmental or private-sector mandates.
How implementation would work
The Comptroller General would carry out the study in consultation with the Securities and Exchange Commission and the Financial Industry Regulatory Authority. No rulemaking or enforcement mechanism is established. The GAO must deliver its report — including findings, determinations, and any administrative or legislative recommendations — to Congress within 360 days of enactment. Congress retains discretion over whether to act on those recommendations.
Legislative status & sources
Latest action
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Official CRS summary
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This bill requires the Government Accountability Office to study and report on the costs encountered by small- and medium-sized companies when undertaking initial public offerings.
Legislative subjects
Accounting and auditing; Congressional oversight; Finance and Financial Sector; Financial services and investments; Government studies and investigations; Securities; Small business
Committee report
H. Rept. 119-128