The SEC Wants More Companies to Go Public. Fixing Registered Offerings Is How It Starts.
By Anya Coverman, President and Chief Executive Officer, Institute for Portfolio Alternatives
The number of U.S. public companies has fallen by 40% since the 1990s, and reversing that decline is one of the few things securities regulators have agreed on across administrations. The U.S. Security and Exchange Commission’s new registered offering reform proposal is aimed squarely at that problem. For sponsors, one provision matters most: preempting state registration and qualification for SEC-registered offerings.
Today, a federally reviewed, continuously reporting offering must also clear separate merit review in dozens of states. That system is out of step with the proposition of federal securities law, whereby an issuer can sell to any investor, regardless of wealth, if it provides full disclosure and submits to SEC review. Merit review lets a regulator decide whether an investment is fair enough, priced well enough, or limited enough for an investor to buy. Nontraded real estate investment trusts and nontraded business development companies are nearly the only SEC-registered offerings still carrying that burden.
The result is hard to justify. An investor can put an entire portfolio into a single technology stock, yet a state may forbid that same investor from placing more than a sliver of it in a diversified REIT or BDC.
The clearest evidence the framework is not working is that the market has already begun moving around it. Robert A. Stanger & Co. data show that publicly registered offerings accounted for roughly 90% of new non-listed REIT launches from 2016 through 2022. Since 2023, private placements have represented most new launches across the combined nontraded REIT and nontraded BDC market.
Fundraising tells the same story. Publicly registered nontraded REIT fundraising fell from $33.2 billion in 2022 to $5.7 billion in 2025, while private placement REIT fundraising surged from $1.4 billion to $9.6 billion — lifting private placements from around 4% to roughly 63% of total nontraded REIT capital raised. In BDCs, private placement fundraising more than doubled, from $9.5 billion to $20.6 billion, accounting for roughly 30% of combined nontraded BDC capital raised, even as registered BDC fundraising grew from roughly $23.7 billion to $44.4 billion.
The point is not that capital is disappearing. It is simply being routed through the channel that works. Sponsors are raising capital under Regulation D, often inside SEC-reporting vehicles, giving investors public-company transparency with private-offering flexibility. There is nothing wrong with that structure. But if policymakers want capital formation to run through registered offerings with SEC review, the registered framework has to work.
We have run this experiment before. Mutual funds were once subject to state-by-state review — the “crazy quilt” of conflicting rules in which a single state’s comment could dictate disclosure for investors everywhere. The 1996 National Securities Markets Improvement Act, or NSMIA, preempted that review and put a single national standard in its place. What followed was not less investor protection; it was scale, competition, and lower costs.
That is the opportunity here. A sponsor should be able to launch a REIT or BDC once through federal registration, rather than negotiating it through dozens of state offices. That takes meaningful cost out of every offering, allows smaller and newer sponsors to compete, and makes the registered offering a genuine choice again.
None of this removes investor protection. SEC registration, disclosure, and ongoing reporting stay intact. Advisers and broker-dealers remain bound by fiduciary and best-interest obligations. States keep their antifraud authority, which is the same arrangement that has governed mutual funds for nearly 30 years.
The concern animating this proposal is not partisan. NSMIA cleared a Republican Congress and was signed by a Democratic president. The IPA has made this case to state regulators and to the SEC for years. Making the registered offering a workable, attractive path again is one concrete way to bend the public-market curve. The SEC’s proposal is the most serious step toward fixing the problem in two decades, and it deserves thoughtful engagement during the comment period.
Anya Coverman serves as president and chief executive officer of the Institute for Portfolio Alternatives, an advocacy organization for the portfolio diversifying investment industry. In this role, she leads the organizations’ efforts to bring together top asset managers, product distribution partners and industry service providers, as well as drive industry progress through education and advocacy initiatives. Prior to joining IPA in 2017, Coverman was the deputy director of policy and associate general counsel at the North American Securities Administrators Association, the national association representing state financial regulators.
The views and opinions expressed in the preceding article are those of the author and do not necessarily reflect the views of AltsWire.
For more Institute for Portfolio Alternatives news, visit its directory page.
