The SEC [link] has said that it is planning to launch a new set of guidelines “early next year” to create “sort of a fast lane where [the SEC] will prioritize registration of investments in the energy sector.” The guidelines will require the SEC to complete its review of a power company’s registration statement in less than 45 days, and will allow applicants to bypass the SEC’s 20% public float requirement to avail of a lower 15% public float minimum. The SEC thinks this will “enable faster approvals” by “making it easier to comply”.
MB bottom-line: Maybe I’m reading the information wrong, or maybe the information provided by the SEC is incomplete because this is only at the “concepts of a plan” phase, but it seems like the only things mentioned to make this “fast lane” were for the SEC to comply with some existing timelines from other statutes and then to allow the companies to circumvent the default minimum public ownership requirement. In the re-development of the REIT Law, one of the key things was lowering the minimum public ownership level for REITs from 40% to 33.33%, but neither of these levels is below the PSE’s default (they were and are well above it). I’m not sure what lowering the MPO does to increase the speed of approvals, but I could see how promising to act quickly on an application and then not requiring the company to sell as much of itself to the public could be viable inducements to get more companies to list. From an investing perspective, I think it’s always better to have more options, but from a trading perspective, I think it’s better to push public floats up to make sure there are enough shares in the public to facilitate a vibrant market of potential buyers and sellers. The recent moves of the SEC and PSE to lift the minimum public float are steps in the right direction. Let’s see what the guidelines say in FY25.
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